Microsoft and Hitachi Form Multibillion-Dollar AI Agreement

Microsoft has announced a multi-billion-dollar AI-focused partnership with Japan’s Hitachi.

The collaboration is designed to use generative artificial intelligence (AI) to fuel the growth of Hitachi’s business software and services business Lumada, particularly in “social infrastructure” areas like energy and mobility, per a Monday (June 3) news release.

“We are entering a new era of AI with the promise to deliver transformative business outcomes across every role and industry,” Microsoft CEO Satya Nadella said in the release.

“Our expanded partnership with Hitachi will bring together the power of the Microsoft Cloud with Hitachi’s industry expertise to improve the productivity of 270,000 Hitachi employees and help address customers’ biggest challenges, including sustainability.”

The three-year partnership will see Hitachi incorporate Microsoft products such Microsoft Cloud and GitHub Copilot into Lumada. Hitachi aims to achieve revenues of $18.9 billion from Lumada during this fiscal year.

Hitachi CEO Keiji Kojima said his company has already been working with Microsoft on digital solutions for the manufacturing and logistics field.

“Under this new agreement, we are excited to further accelerate social innovation by expanding our efforts to social infrastructure areas such as energy and mobility, and by applying generative AI, to improve the productivity of frontline workers, which will become even more important in the future,” he said. “By combining our capabilities, we can help solve the issues faced by our customers and society, and contribute to a more sustainable future.”

The partnership comes as Microsoft continues to invest heavily in AI, both through efforts like its recently announced infrastructure project in Sweden, and its plans for the personal computer.

As PYMNTS wrote last month, Microsoft’s new “Copilot PCs” — a new version of Windows machines built to handle generative AI processes locally — demonstrate that the company is “betting that the future of computing will be powered by AI — and that users will want that intelligence at their fingertips rather than in the cloud.”

As covered here, the move toward local AI processing on personal computers is a key shift in the industry, as the need to address issues like data privacy and performance bottlenecks associated with cloud-based processing grows as AI becomes more common.

By giving personal computers with dedicated hardware for AI tasks, Microsoft hopes to offer users a more secure, efficient computing experience.

“However, it remains to be seen how well these machines will perform in real-world scenarios and whether they will justify the potentially higher costs associated with the advanced hardware,” PYMNTS wrote.