Hitachi SVP on Business Strategy, Role of AI

Hitachi’s 2026 Vision: Convergence of Digital and Physical – A Detailed Summary

Key Concepts: Hitachi Zero, EtchMax, LUMA, HMX, Digital Systems & Services (DSP), Humanoid Integration, Social Infrastructure, Industry 4.0, AI-driven Transformation, Cooling Technologies (Water, Liquid, Immersion).

I. Hitachi’s Core Business & Strategic Shift

Hitachi’s business is fundamentally rooted in social infrastructure, encompassing energy, mobility (rail systems), manufacturing (including cancer research and battery technology), all impacting daily life. The company is undergoing a significant transformation, moving beyond traditional infrastructure provision towards a convergence of the digital and physical realms. This is embodied in Hitachi Zero, a strategic initiative focused on integrating 110 years of operational and physical data with artificial intelligence algorithms. This isn’t simply about digital transformation, but about leveraging existing physical assets and expertise.

Hitachi is actively launching EtchMax, a platform designed to utilize AI technologies alongside its established physical operations. The company emphasizes its long-term R&D focus, operating on a 10-15 year innovation cycle.

II. Partnerships & Ecosystem Development

Hitachi is fostering partnerships with companies like Nvidia, Google, and open-source communities to enhance its capabilities and promote inclusivity. These collaborations are crucial for accelerating the development and deployment of its AI-driven solutions. The goal is to achieve efficiency gains and broader societal impact.

III. Addressing Concerns Regarding Cooling Technologies & Nvidia’s Rubin Chips

Recent commentary from Nvidia’s Jensen Huang regarding the reduced cooling requirements of the Rubin chips sparked concerns about the future of Hitachi’s data centre cooling business. However, Hitachi views this not as a threat, but as an evolution. The company operates across a “five-layer cake” of infrastructure: energy (transmission & distribution), chip manufacturing equipment (specifically for TSMC), and core infrastructure. Hitachi is a creator of three of these layers and a consumer of the other two, positioning it as essential to the overall ecosystem.

While acknowledging the trend towards reduced cooling needs (moving from water cooling to liquid and immersion cooling), Hitachi intends to adapt and innovate in this space, leveraging its long-term R&D capabilities. They anticipate continuous demand for cooling solutions, even if the specific technologies evolve.

IV. Global Business Strategy & China’s Role

Hitachi’s business is increasingly global, with over 60% of revenue generated outside of Japan. China, the Americas, and Europe represent the fastest-growing segments. While China remains a vital market (particularly for elevators), Hitachi is strategically increasing its focus on the Americas and Europe, driven by infrastructure needs and government investment in national defense (including digital infrastructure in Japan).

The company’s Digital Systems & Services (DSP) division, the fifth-largest globally, is a key component of its strategy, handling national security, financial services, and internal digital transformation. DSP accounts for approximately $20 billion of Hitachi’s $70 billion in business.

V. Digital Transformation & the Role of Global Logic & HMX

Hitachi’s digital transformation journey began with the acquisition of Global Logic five years ago, which now forms the core of its software and services capabilities. This transformation is evolving into HMX, a platform integrating utility services, physical infrastructure, and the Internet of Things.

LUMA, Hitachi’s platform, is currently in its 3.0 iteration and is a key manifestation of this evolution, transitioning from software assets to digital assets. Hitachi aims for 50% of its sales to originate from software by fiscal 2028 and expresses confidence in achieving this target. The company believes software and AI will ultimately “run the world.”

VI. Humanoid Integration & Workforce Development

Hitachi is actively exploring the use of humanoids in electronics manufacturing, particularly to address a shortage of skilled labor. Unlike some industries fearing job displacement, Hitachi views humanoids as a way to augment its existing workforce, specifically in areas requiring skilled electrical and mechanical expertise (e.g., transformer winding). The limiting factor for growth, identified previously with Global Logic, remains skilled manpower, making humanoid integration a priority. Hitachi emphasizes the need for “asynchronous” humanoid capabilities – robots that can work alongside humans, not simply replace them.

VII. Talent Acquisition & Global Workforce

Hitachi currently employs 28,000 people globally, with 110,000 within its software and services segment (primarily in India). The company is actively seeking to recruit 50,000 strategists globally, focusing on transforming its existing workforce and expanding its capabilities across EMEA, Japan, and other regions. This global recruitment strategy is driven by the need to support clients in their own digital transformations.

Notable Quote:

“Software is going to run the world and so is the AI, and that’s what it actually is actually standing tall.” – Hitachi Representative.

Technical Terms:

• EtchMax: Hitachi’s platform for integrating AI with physical operations.
• LUMA: Hitachi’s core platform for digital transformation.
• HMX: The next phase of Hitachi’s transformation, integrating utility services, physical infrastructure, and IoT.
• DSP (Digital Systems & Services): Hitachi’s division focused on digital solutions, including national security and financial services.
• Immersion Cooling: A cooling technique where components are submerged in a dielectric fluid.
• Liquid Cooling: A cooling technique using a liquid coolant to remove heat.

Conclusion:

Hitachi is strategically positioning itself at the forefront of the convergence between the digital and physical worlds. By leveraging its extensive experience in social infrastructure, investing in AI and digital technologies, and fostering strategic partnerships, the company aims to drive innovation and achieve significant growth. The focus on humanoid integration and a global talent acquisition strategy underscores Hitachi’s commitment to long-term sustainability and leadership in the evolving technological landscape. The company’s adaptability, particularly in response to evolving cooling technologies, demonstrates a proactive approach to market changes and a commitment to continuous innovation.