Walking into the Hitachi offices in Santa Clara feels less like visiting a century-old industrial giant, and more like stepping onto the Google campus just a few miles north. There’s a massive lawn of artificial grass, dotted with Adirondack chairs, and inside, communal spaces feature massage chairs and refrigerators stocked with Japanese snacks and ice creams.
It’s a physical representation of the mark that data center load growth has made on the global conglomerate. The company, which was founded in Japan in 1910, is worth an estimated $147 billion, and has more than 600 subsidiaries worldwide. Its energy business — which is now an entirely separate operation, dubbed Hitachi Energy — is one of the largest manufacturers of transformers and high-voltage switchgear in the world, and accounts for around 30% of the conglomerate’s total revenue.
Today, data centers are a rapidly growing customer segment for Hitachi’s energy and digital services businesses. In the last few years, the company has reoriented to position itself as a godsend for the biggest players in the AI era: the rare partner that understands both the physics of the grid, and the logic of an AI model.
This evolution has been both physical — the company has significantly ramped up its manufacturing footprint and Anthony Allard, head of Hitachi Energy in North America, relocated from the East Coast to Silicon Valley at the end of last year — and cultural.
“We have had to adapt as a company,” Allard told Latitude during a press visit at the Santa Clara offices this week. “Hitachi Energy has been serving utilities for the longest part of our history, so we’ve tuned ourselves to that pace.”
Now, though, the company (and its many upstream suppliers) are having to move at the much faster clip of data center companies.
What’s needed for speed
Part of that change of pace, Allard said, is relying more heavily on partnerships to ensure Hitachi can offer its customers what they need. The energy division, for example, is currently in conversation with gas turbine manufacturers, to assess a potential partnership that would make the company more valuable to data center developers.
But the most visible sign of load growth’s impact is in Hitachi Energy’s domestic factory footprint. Last fall the company announced a $1 billion investment in its U.S. manufacturing chain, including building a new, $457 million power transformer facility in Virginia.
Meanwhile, as offshore wind in the U.S. has faltered and data centers have risen, Hitachi Energy has also had to reallocate existing supply chain capacity.
Offshore wind projects needed transformers and high-voltage switchgear that can handle harsh conditions and support high-voltage collection from turbines. Data centers, meanwhile, are more focused on extreme power density and ultra-fast deployment, and don’t generally have the same voltage needs.
In October, the Hitachi parent company signed an MoU with OpenAI to co-develop infrastructure like transformers and grid connection solutions specifically for the largest AI data centers. Hitachi can use existing factories to service those customers, but adapting them will take investment, Allard said: “It’s not one-to-one.”
That buildout has also come with changes to how the company approaches labor. “We had to rethink the way we are involved in the community in order to attract [workers],” Allard said — which is a challenge Hitachi Energy has in common with its hyperscaler customers.
In the case of the new factory in Virginia, there wasn’t enough housing in the local area for the influx of factory workers Hitachi needed. Getting around that particular bottleneck meant partnering with the county and the state’s housing authority to literally build new homes.
And because speed is paramount, Hitachi Energy has also been working to get its new people trained and ready to go faster — both in factories and corporate offices. Allard said the company is experimenting with using AI to do so.
In the business of change management
When it comes to how the company engages with its customers, things have also changed rapidly.
For one thing, Hitachi customers previously ordered equipment a la carte, project-by-project. Now, by taking the new approach of clustering orders and securing long-term commitments, Hitachi Energy can provide the financial guarantee that its upstream suppliers — many of whom are what Allard refers to as “mom and pop shops” — need to invest in their own upgrades.
This shift away from single-product sales is driven in part by data center customer needs, explained Emrah Ercan, vice president of life cycle services for Hitachi Energy in North America. They require a more hands-on approach, especially compared to the utilities that have historically made up the bulk of Hitachi Energy’s customers, because they’re new to this.
“They now have to run the substations and some critical assets they are not used to,” Ercan said. “They want to focus on running the data centers, not the power grid.”
As a result, Hitachi Energy is moving toward standardization, which is key to speeding up timelines and bringing down costs. Today, most utilities have their own distinct standards for equipment, Allard explained. Each utility orders what is essentially a custom transformer, “sometimes even down to the color.” The result is lead times that stretch years.
Standardizing equipment, however, could slash that timeline down to as little as 12 months and unlock more easily scalable batch production. But making that change has been complicated, according to Allard. “When you have this conversation about standardization, you cannot go against years of culture, of habits,” he said. “So it’s change management.”
But data center customers don’t have those years of expectations. And as they fill up Hitachi Energy’s pipeline, the company is seeing “a bit more traction to standardization,” Allard said. “There’s so much pressure in terms of going fast to build their data center that everything is on the table.”
This isn’t Hitachi Energy’s first standardization rodeo. Several years ago, the company experienced a similar dynamic with Europe’s offshore wind industry, Allard added: “They really wanted to deploy at speed and scale, so they were open to being more standardized.”
Digital glue
Against this backdrop, Hitachi’s energy division is growing rapidly. In 2024, Hitachi Energy reported nearly $16 billion in earnings, up 24% year-over-year. 2025 numbers aren’t out yet, but are projected to reach over $19 billion.
That said, Energy is still smaller than Hitachi’s industrial division, which brought in more than $20 billion in 2024. But while the company is perhaps best known for its physical equipment, both energy and industry are being outpaced by Hitachi’s digital businesses.
Leaning in on digital transformation is part of the company’s “One Hitachi” strategy, an effort to cohere a collection of independent subsidiaries into a more unified entity. The idea is that if Hitachi can not only manufacture a data center’s essential grid and industrial assets, but also deliver the software, data infrastructure and AI that orchestrates them, it will be an essential partner throughout the ebbs and flows of load growth.
Today, the energy division works closely with GlobalLogic, a digital engineering firm Hitachi purchased in 2021; Hitachi Digital Solutions arm, which manages cloud-to-edge integration; and Hitachi Vantara, which is focused on the underlying data storage infrastructure. According to Carlos Elena-Lenz, VP of digital enablement and transformation at Hitachi Energy, the four businesses are working together to design “grid‑to‑rack” AI factories, deploy grid‑enhancing technologies, and build real‑time digital twins of transmission and distribution networks.
Three or four years ago, this kind of cross‑organizational lineup “would not have been at the same table,” Elena-Lenz added. But the parallel trends of load growth and digitalization are pushing them to integrate offerings and jointly face customers.
Earlier this year Hitachi said it was planning to integrate GlobalLogic and Hitachi Digital Services, in order to create a single, end-to-end digital service to take a project from initial software design through to long-term cloud operations.
Hitachi Vantara, meanwhile, which provides the high-performance data storage and hybrid cloud infrastructure required to house the massive datasets AI demands, may have its own, more fraught, path. Last fall, Vantara laid off more than 100 employees across departments including software engineering, marketing, and customer support, according to the San Francisco Chronicle.
And, according to Bloomberg, Hitachi is actively seeking a private equity buyer to acquire Vantara for approximately $1.3 billion, in order to focus on higher-margin operations.
That said, senior VP of business strategy Simon Ninan explained that for Hitachi, Vantara completes the offering of something no other equipment company has: comprehensive solutions for all parts of the data center technology stack, from the high-voltage substation to the individual AI chip on the server rack. And it’s the original Vantara office building in Santa Clara that now serves as Hitachi’s Silicon Valley home base, putting Vantara and its digital infrastructure teams physically at the heart of the company’s AI-era operations — at least for now.
“Why is it that after 115 years, we’re suddenly talking about ‘One Hitachi’?” Ninan asked, nodding to the wider consolidation strategy. Bringing all of Hitachi’s businesses closer together, ensuring they can “actually talk to each other,” he added, is what the digital layer is really about: an acknowledgement of the fact that “the world’s a different place right now.”
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