Shares in Japanese conglomerate Hitachi (HTHIY) leapt forward today after it sealed a deal with OpenAI to use its technology throughout its operations.
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Data and Digital
The strategic partnership created by the two groups will involve collaboration on Hitachi’s energy and power grid operations, cooling equipment, storage and its digital solutions hub Lumada.
Hitachi will supply power transmission and cooling equipment for AI data centers. Additionally, ChatGPT maker OpenAI will contribute its advanced large language model to Lumada, aiming to leverage the AI technology effectively.
Hitachi’s OpenAI partnership could boost orders for its energy segment, which accounted for a significant chunk of the company’s earnings last year, wrote Bloomberg Intelligence analysts Takeshi Kitaura and Ian Ma in a note. The “potential for data storage equipment supply” could also help Hitachi’s “struggling” storage unit, they said.
This is the latest in a growing list of partnerships between Japanese tech firms and US artificial intelligence giants.
Big in Japan
Masayoshi Son’s SoftBank Group (SFTBY) has seen its stock soar more than 100% since announcing its involvement in the Stargate Project with OpenAI, Oracle (ORCL) and other US tech firms in January.
Also today semiconductor giant Nvidia (NVDA) strengthened its alliance with Fujitsu (FJTSY) to co-develop AI infrastructure such as industry-specific AI agents in healthcare, manufacturing and robotics.
The project will start in Japan, building on Fujitsu’s long local presence, with plans to take it global once the model is tested and proven. Nvidia’s GPUs, which are vital for AI, will serve as the core technology for the system.
U.S. tech companies find Japan attractive as it has been slower than other developed countries to digitalize its economy and society. It needs new innovations to combat the issues it faces with labor shortages and an aging workforce.
Japanese giants like Hitachi are also seen by U.S. firms as being long-standing businesses, with experienced and skilled staff. They have strong brand recognition and are eager to use their capabilities more globally.
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