Hitachi bets on industrial expertise to win the physical AI race

Physical AI–the branch of artificial intelligence that controls robots and industrial machinery in the real world–has a hierarchy problem. At the top, OpenAI and Google are scaling multimodal foundation models. In the middle, Nvidia is building the platforms and tools for physical AI development. 

And then there is a third camp: industrial manufacturers like Hitachi and Germany’s Siemens, which are making the quieter but arguably more grounded argument that you cannot train machines to navigate the physical world without first understanding it.

That argument is now moving from boardroom strategy to factory floor deployment, as Hitachi revealed in a recent interview with Nikkei Asia.

Why Physical AI needs more than a good model

Kosuke Yanai, deputy director of Hitachi’s Centre for Technology Innovation-Artificial Intelligence, is direct about what separates viable physical AI from the theoretical kind. “Physical AI cannot be implemented in society without a systematic understanding that begins with foundational knowledge of physics and industrial equipment,” he told Nikkei.

Hitachi’s pitch is that it already holds much of that foundational knowledge–accumulated over decades of building railways, power infrastructure, and industrial control systems. The company has thermal fluid simulation technology that models the behaviour of gases and liquids, and signal-processing tools for monitoring equipment condition — what Yanai describes as the engineering foundation underpinning Hitachi’s ‘extensive knowledge of product design and control logic construction.’

From concept to deployment: Daikin and JR East

While Hitachi’s overarching physical AI architecture–the Integrated World Infrastructure Model (IWIM), which it describes as a mixture-of-experts system integrating multiple specialised models, simulators, and data sets–remains in the concept verification stage, two real-world deployments signal that the underlying approach is already producing results.

In collaboration with Daikin Industries, Hitachi has deployed an AI system that diagnoses malfunctions in commercial air-conditioner manufacturing equipment. The system, trained on equipment maintenance records, procedure manuals, and design drawings, can now identify which component is likely failing when an anomaly is detected–the kind of operational intuition that previously existed only in the heads of experienced engineers.

With East Japan Railway (JR East), Hitachi has built an AI that identifies the root cause of malfunctions in the control devices running the Tokyo metropolitan area’s railway traffic management system, and then assists operators in formulating a response plan. In a network where delays ripple across millions of daily journeys, the ability to accelerate fault diagnosis carries real operational weight.

The R&D pipeline: Cutting development time

Hitachi’s physical AI push is also showing up in its research output. In December 2025, the company published findings from two projects presented at ASE 2025, a top-tier software engineering conference, that address a persistent bottleneck in industrial AI: the time and effort required to write and adapt control software.

In the automotive sector, Hitachi and its subsidiary Astemo developed a system that uses retrieval-augmented generation to automatically produce integration test scripts for vehicle electronic control units (ECUs)–pulling from hardware-specific API information and frontline engineering knowledge. In a pilot involving multi-core ECU testing, the technology reduced integration testing man-hours by 43% compared to manual execution.

In logistics, the company developed variability management technology that modularises robot control software into reusable components structured around a robot operating system (ROS). By mapping out the environmental variables and operational requirements of different warehouse settings in advance, the system lets operators adapt robotic picking-and-placing workflows to new products or layouts without rewriting software from scratch.

Safety as a structural requirement, not an afterthought

One thread that runs through all of Hitachi’s physical AI work is its emphasis on safety guardrails–not as a compliance checkbox, but as an engineering constraint baked into system design. Yanai told Nikkei that the company is integrating its control and reliability technology from social infrastructure development to prevent AI outputs from deviating from human-approved operating parameters. 

This includes input validation to screen out data that models should not be trained on, output verification to ensure machine actions do not endanger people or property, and real-time monitoring of the AI model itself for operational anomalies.

It is a meaningful distinction. Physical AI systems fail in the real world, not in a sandbox. The stakes for an AI controlling railway signalling or factory robotics are categorically different from those governing a chatbot.

Infrastructure to match the ambition

On the infrastructure side, Hitachi Vantara–the group’s data and digital infrastructure arm–is positioning itself as an early adopter of NVIDIA’s RTX PRO Servers, built on the RTX PRO 6000 Blackwell Server Edition GPU, designed to accelerate agentic and physical AI workloads. The hardware is being paired with Hitachi’s iQ platform and used to build digital twins–virtual replicas of physical systems–that can simulate everything from grid fluctuations to robotic motion at scale.

The IWIM concept, meanwhile, is designed to connect Nvidia’s open-source Cosmos physical AI development platform with specialised Japanese-language LLMs and visual language models via the model context protocol (MCP)–essentially a framework to stitch together the models, simulation tools, and industrial datasets that physical AI systems require.

The broader race in physical AI is far from settled. But Hitachi’s position–that domain expertise and operational data are as important as model architecture–is increasingly hard to dismiss, particularly as deployments with partners like Daikin and JR East begin to demonstrate what that expertise is actually worth in practice.

Sources: Nikkei Asia (Feb 21, 2026); Hitachi R&D (Dec 24, 2025); Hitachi Vantara Blog (Aug 27, 2025)

See also:Alibaba enters physical AI race with open-source robot model RynnBrain

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