US President Donald Trump and Japanese Prime Minister Sanae Takaichi have announced a joint initiative for a $40bn nuclear power project.
The project, which will be carried out by GE Vernova and Hitachi, forms part of a broader strategic investment fund established between the US and Japan.
These companies plan to build small modular nuclear reactors in Tennessee and Alabama.
In addition to the nuclear project, Japan will invest up to $33bn in natural gas power plants in Pennsylvania and Texas.
Details from the White House indicate that these projects aim to address electricity pricing issues and support US competitiveness in global technology sectors.
Demand for energy has grown with the expansion of data centres that underpin AI development.
While specific operational timelines for the new reactors have not been released, industry officials noted that these small modular reactors are designed for quicker deployment than traditional nuclear facilities, though they still require regulatory approval before integration into US power grids, reported Bloomberg.
The joint investment comes from a $550bn bilateral fund created as part of a trade agreement that also reduced tariffs on Japanese automobile exports.
Last month, the two countries initiated three other investment projects valued at $36bn covering oil export infrastructure, gas power generation, and synthetic diamond manufacturing within the US.
Japan’s Ministry of Economy, Trade and Industry stated that companies including IHI Corporation, Japan Steel Works, and Tamagawa Seiki will supply components for the energy projects.
The Ministry added that these efforts contribute to securing stable energy supplies amidst increasing global demand as well as regional geopolitical uncertainties.
Further collaboration includes rare-earth mining and recycling operations led by Mitsubishi Materials and Mitsubishi Corp. in Indiana and Arizona.
Both governments are also supporting Albemarle Corp.’s lithium-ion battery initiative in North Carolina.
At the meeting, Trump and Takaichi signed additional agreements aimed at accelerating research on critical minerals such as rare-earth muds near Minamitorishima Island.
These accords include provisions to increase production capacity for key minerals through measures such as trade initiatives backed by price floors.
The leaders reiterated commitments to work together on scientific research, space exploration, including NASA’s Artemis lunar programme, and defence cooperation across the Indo-Pacific region.
The strategic partnership formalises lower tariff rates for Japanese automotive exports while promoting direct investment flows between both countries.
Questions remain about how funds from the $550bn initiative will be disbursed over time.
