Swansea University and HP have agreed to work together to research 'sustainable next-generation cities'.
The three-year collaboration project will research city-scale resource management using technology such as smart metering, intelligent cities, situational awareness, data analytics and threat detection.
Researchers will also take advantage of HP's sensor data management technology and smart grid solutions, the company explained.
The programme will initially focus on energy management, as part of efforts to meet the Welsh Government's goal of reducing greenhouse gas emissions by 80 percent by 2050.
For the first stage of the programme, Swansea University will set up a testbed at its existing campus to research how to best integrate smart metres, smart grid technologies, ultra-low-power wireless sensors and resource management software. This will be supported by HP hardware and software and the company's experience from its own testbeds in Palo Alto.
The partners hope that their research will to support the radical changes in energy provision and consumption required to meet the 2050 target, and help to encourage the development of digital economy products and services.
After the initial proof of concept, the project will expand into the university's new 65 acre £500 million Bay Campus after it opens in September 2015.
Professor Javier Bonet, head of Swansea University's College of Engineering and the project's strategic director, said: "Working with global enterprises like HP as well as academia and local small and medium businesses is a fundamental part of ensuring a sustainable community.
"This program will have direct economic benefits for Wales in terms of knowledge creation, innovation and exploitation, as well as the development of a highly-skilled work force."
Chandrakant Patel, senior fellow and chief engineer at HP Labs, said: "We have long held that the future of our cities will require operating at the intersection of people, planet, profit and peta-data. This programme demonstrates yet another step on our journey towards city-scale resource management."