Japan’s largest power generator, JERA, has agreed to build a hyperscale AI data center next to one of its gas-fired plants in Chiba. The project is expected to cost more than $15 billion and
Japan’s largest power generator, JERA, has agreed to build a hyperscale AI data center next to one of its gas-fired plants in Chiba.
The project is expected to cost more than $15 billion and draw financing from Apollo Global Management, becoming the latest mega data center project funded by outside capital.
Digital Minister Hisashi Matsumoto warned earlier in the year that Japan needs to snap out of its slumber and close the early lead that the US and China have built in computing to avoid becoming an “AI colony.”
A three-way deal between JERA, Dell Technologies and UK developer RHAELM has been announced today, Thursday.
The partners signed a memorandum of understanding to create a standardized template for building AI infrastructure across Japan, starting at JERA’s Chiba Thermal Power Station.
Apollo intends to act as RHAELM’s strategic investment and financing partner on that first site.
The reason the project will be built next to an existing thermal plant comes down to electricity and how long it takes to get.
In Tokyo, new grid connections can take five to 10 years, a wait that has repeatedly stalled data center projects even after the money is committed. International hyperscalers including AWS, Microsoft and Oracle have responded by spreading capacity across multiple regions to find power the Tokyo grid cannot supply.
JERA says the Chiba facility will draw power directly from the plant rather than waiting on a grid hookup. Operations are targeted to begin in phases around 2028. The data center is expected to reach full capacity in 2029, with JERA supplying power under a contract running 15 to 25 years.
The company says it generates roughly a third of Japan’s power and provides nearly all the electricity consumed in Greater Tokyo.
RHAELM will develop, build, operate and finance the data center itself while Dell Technologies will contribute its AI hardware.
The site is sized for up to 400 megawatts. At that scale, JERA says, it would be the largest single-site AI deployment in Japan and one of the biggest in Asia.
JERA’s 15- to 25-year power deal fixes the single largest running cost when it comes to building data centers. The deal also hands JERA a guaranteed buyer for years.
If the Chiba facility is completed smoothly, JERA and RHAELM say they want to replicate the data center at other JERA sites. The companies have an ambition of providing multi-gigawatt AI capacity across Japan by the 2030s.
Their initiative is in line with Tokyo’s “Watt-Bit Collaboration,” which is intended to coordinate power and digital infrastructure.
“JERA is uniquely positioned to power Japan’s AI ambitions,” Global CEO and Chair Yukio Kani said in the company’s statement, pointing out the company’s reach across the LNG value chain.
Notably, Blackstone President Jonathan Gray said in June that the firm plans to invest $30 billion in Japanese AI data centers over three to five years. Apollo’s role at the Chiba facility adds another large U.S. investor to the list of companies expanding into Japan.
Also in June, Cryptopolitan reported that Japan’s Digital Minister Hisashi Matsumoto warned that the country risks becoming an “AI colony” if it cannot close its computing gap with the US and China.
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