Hitachi Ltd. and Microsoft Corp. announced a projected multibillion-dollar collaboration over the next three years that will accelerate social innovation with generative AI.

Hitachi will propel growth of the Lumada business, with a planned revenue of 2.65 trillion yen (US$18.9 billion)^*1 in FY2024. Moreover, it will also promote operational efficiency and productivity improvements for Hitachi Group’s 270,000 employees.

Specifically, Hitachi will embed the Microsoft cloud, Azure Open AI Service, Dynamics 365, Copilot for Microsoft 365 and GitHub Copilot into Lumada solutions. Thus, providing innovative solutions for the energy, mobility, and other industries.

Address Pressing Business Needs

In addition, the two companies will promote joint projects to address pressing business needs. These include bolstering cloud services, enhancing security, and mitigating the environmental footprint of data centers, which have become an increasing area of focus with the growing use of generative AI.

“Hitachi has been driving transformation by applying AI across the Hitachi Group to improve productivity and will invest 300 billion yen（US$2.1 billion) in GenAI to capture new growth opportunities in FY2024. Hitachi and Microsoft have already been working on a variety of co-creation projects including the development of next-generation digital solutions for the manufacturing and logistics fields and the development of a field-extended metaverse that runs on Microsoft Teams,”said Keiji Kojima, president and CEO of Hitachi. 

Furthermore, Kojima said, “Under this new agreement, we (will) 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. By combining our capabilities, we can help solve the issues faced by our customers and society, and contribute to a more sustainable future.”

“We are entering a new era of AI with the promise to deliver transformative business outcomes across every role and industry,” said Satya Nadella, chairman and CEO, Microsoft. “Our expanded partnership with Hitachi will bring together the power of the Microsoft Cloud — including Microsoft Copilot — with Hitachi’s industry expertise to improve the productivity of 270,000 Hitachi employees and help address customers’ biggest challenges, including sustainability.”

Hitachi’s business transformation

Hitachi’s Generative AI Centerand Microsoft will collaborate to improve operational efficiency and application development within the Hitachi Group. Specifically, by using Copilot for Microsoft 365 and GitHub Copilot. Hitachi will also use Azure OpenAI Service to enhance its customer service. As part of Hitachi’s groupwide transformation, Hitachi will combine Azure OpenAI Service and GitHub Copilot with its systems development expertise to maintain high quality and improve productivity for mission-critical system development. Hitachi’s internal validation confirmed that when its detailed system design knowledge was incorporated with Microsoft Azure OpenAI Service and GitHub Copilot, the application source code could be properly generated 70% to 90% of the time, resulting in high-quality output.

Hitachi Rail is leveraging GenAI for predictive maintenance, enhancing equipment monitoring and refining forecast accuracy. This proactive approach prevents breakdowns, increases service quality, reduces operating expenses and augments safety.

For example, a cloud-based platform on Microsoft Azure was used to streamline data visualization and analysis, empowered by AI to furnish data-driven insights to digitally monitor rail infrastructure. These insights were translated into actionable steps for Network Rail, enhancing decision-making for predictive maintenance of overhead lines.

Develop innovative digital solutions

Hitachi is enhancing its Lumada solutions by incorporating the capability of generative AI. As part of the initiative, Hitachi has already started to use Microsoft’s Generative AI for JP1 Cloud Services, a SaaS version of JP1. This is its integrated operations management software with approximately 20,000 customers. This will accelerate response times to address failures, and enable improved operational efficiencies for IT departments, financial and public institutions.

In an internal verification test conducted earlier, Hitachi confirmed that the time required for the operator to make an initial response to an alert was reduced to approximately two-thirds by using generated AI to respond to the alert and displaying the source of the citation, such as a manual, that provided the basis for the response.

In addition, Hitachi and Microsoft will also support the energy transition with improved access to and strengthening of digital solutions. Specifically, for asset performance management, energy trading, and risk management to reduce downtime and increase profitability. Increased computing power and cloud infrastructure are both critical to scaling these applications. Hitachi Energy’s Enterprise Software Solutions technology and its partnership with Microsoft are key to optimizing the energy network, from generation, through transmission and distribution, and ultimately in delivering reliable and sustainable energy to customers.

05 June 2024