How Physical AI is Powering Hitachi’s Future

A major restructuring is underway at Hitachi as the multinational conglomerate accelerates its transition toward becoming a "digital-centric company" under its Inspire 2027 management strategy.

The move aims to reinforce operations amid shifting global macroeconomic conditions, while intensifying focus on Lumada 3.0 – the next evolution of its digital solutions platform – built around an increasing emphasis on physical AI.

Hitachi defines physical AI as the next frontier in AI.

The company’s ambition is to position itself as the "world’s leading practitioner of physical AI" by integrating IT, OT, products and its "customer zero" ecosystem, where innovations are validated and implemented within its own business units.

Toshiaki Tokunaga, President and CEO of Hitachi, explains: "This strategic evolution is designed to strengthen our foundations for sustainable growth and accelerate our Lumada Business, particularly through physical AI.

"The rapid evolution of AI, from generative to agentic and now physical AI, combined with shifting global policies, defines our dynamic business landscape. As we enter the second year of our Inspire 2027 strategy, this new structure enables us to respond with even greater strength, leveraging the collective power of our IT, OT and product capabilities as One Hitachi."

New structure supports Lumada 3.0 growth

At the core of Hitachi’s restructuring is the reorganisation of its Connective Industries Sector.

Noriharu Amiya, Senior Vice President and Executive Officer, has been named CEO of the sector and, under his leadership, the existing three Business Units (BUs) will be realigned to accelerate the development of Lumada 3.0.

In parallel, Hitachi is establishing a new Industrial Products BU designed to target high-demand markets where the company can strengthen its leadership position.

This unit will concentrate on advancing product development and driving growth across the digital assets of Lumada 3.0.

Another addition, the Industrial Solutions BU, will translate physical AI innovations into new digital services, while extending the reach of HMAX by Hitachi – a portfolio of AI-powered solutions for social infrastructure that is already gaining momentum in the mobility and energy sectors.

To reinforce these efforts, the company is transferring its industrial digital transformation division to the Digital Systems & Services Sector for tighter alignment.

A third division, the Urban Solutions & Services BU, will focus on rapidly expanding, mission-critical industries such as semiconductor manufacturing and data centres.

By integrating the expertise of related group companies into this unit, Hitachi aims to capture new growth opportunities aligned with the increasing demand for AI-enabled infrastructure.

Group-wide digital expansion and integration

Hitachi remains firmly committed to advancing the digitalisation of its OT and products businesses across the organisation.

In line with this strategy, the Digital Systems & Services Sector is also undergoing a major restructure.

The industrial DX division, previously part of Connective Industries, is being integrated with the Social Infrastructure Systems BU and the Financial Institutions BU to form the new Digital Services BU.

This consolidated unit will provide AI-driven front engineering, system integration and digital services across key domains including energy, telecommunications, transport, industry, public services and finance.

Leading the unit are Senior Vice President Katsuya Nagano and Vice President Yasuki Imai, both seasoned in enterprise-scale digital transformation and tasked with strengthening Hitachi’s market presence in Japan.

At the same time, Hitachi is bringing together two of its digital subsidiaries – GlobalLogic and Hitachi Digital Services – to strengthen its end-to-end digital delivery capabilities.

The integration aims to bridge chip-to-cloud software development with mission-critical system integration and AI deployment, creating a seamless ecosystem of digital expertise.

Ultimately, the combined entity is expected to be well-positioned to accelerate customers’ digital transformation journeys through closer collaboration and unified support.

Leadership reshuffle

To enable faster and more agile strategic decision-making, Hitachi is forming a new Corporate Strategy Group reporting directly to CFO Tomomi Kato.

The team will oversee corporate strategy, government relations, brand communications and investor relations, managing the entire process from data gathering to public disclosure and brand positioning.

This initiative is intended to "turn environmental changes into growth opportunities" by enhancing focus on capital allocation, strategic planning and portfolio reform.

In addition, recognising the increasing influence of global policy shifts on business operations, Hitachi has appointed Hirohide Hirai to the new role of Chief Government and External Relations Officer (CGRO).

Formerly Vice President and Executive Officer, Hirohide will coordinate across the company’s business units and six strategic regions – the Americas, EMEA, APAC, India, China and Japan – to strengthen decision-making and mitigate political risk.

Senior Vice President Masahiko Hasegawa has been appointed to a new group-level position as Head of Regional Strategies, where he will lead cross-group regional growth initiatives and align efforts to deliver cohesive customer value across global markets.

In addition, as Hitachi seeks to accelerate its adoption of AI and strengthen cybersecurity, the company has promoted Satoko Fujimori to Chief Digital & Security Officer (CD&SO).

Formerly head of the AI & Software Services BU, Satoko will now spearhead AI transformation and security enhancement across the organisation.

Through this comprehensive restructure, Hitachi aims to respond quickly to external changes, leverage physical AI to advance Lumada 3.0, and operate as a unified, digitally driven group.

Toshiaki adds: "I am confident this strategic alignment will further advance our transformation into a digital-centric organisation."