US President Donald Trump and Japanese Prime Minister Sanae Takaichi have announced a joint initiative for a $40bn nuclear power project during Takaichi’s visit to Washington. GE Vernova and Hitachi have agreed to build small modular reactors (SMRs) in Tennessee and Alabama. This is part of a wider strategic investment fund established between the US and Japan whereby Japan will invest up to $33bn in two natural gas power plants in Pennsylvania and Texas.
These three new projects are the second rounds of projects under the $550bn Japan-US strategic trade and investment agreement finalised in late 2025 that lowered tariffs on Japanese imports to 15% (from a threatened 25%) in exchange for massive Japanese investment in the US industrial base. The first round in February related to natural gas, crude oil and diamond projects.
The SMR project aims for 3 GWe of electric capacity to meet surging electricity demand from AI data centres and heavy industry while stabilising consumer energy prices. It will involve GE Vernova Hitachi’s BWRX-300 water-cooled, natural circulation SMR.
In Tennessee the leading location is the Clinch River site in Oak Ridge for which the Tennessee Valley Authority (TVA) has already submitted a construction permit application to the US Nuclear Regulatory Commission (NRC). The agreement identifies Alabama as a key state for subsequent reactor deployments to support its energy-intensive industrial base and growing tech corridor. The primary goal is to provide dedicated, carbon-free baseload power for Alabama’s automotive and aerospace manufacturing hubs.
The Alabama sites are being positioned to offset the retirement of older coal-fired units, ensuring the state remains an energy exporter. New investments from major tech firms in the Huntsville area have spiked electricity demand and the BWRX-300s are intended to meet this “always-on” power requirement without straining the existing residential grid. Likely locations include the Bellefonte, long considered a prime candidate for nuclear expansion due to existing infrastructure. There are also discussions on co-locating SMRs near the existing Browns Ferry NPP to leverage the established security, cooling, and transmission infrastructure.
The project is in the site characterisation and environmental impact phase. Following the successful permitting of the Tennessee units, NRC is expected to fast-track the Alabama applications using the “reference plant” model to speed up approval.
According to the US Department of Commerce: “The Project aligns with the US energy dominance agenda by expanding domestic power generation, enabling long-term national energy security. Nuclear power from SMRs would fuel industrial growth by adding firm, dispatchable capacity.
The White House said: “The United States and Japan will continue to cooperate on matters related to investment security, and Japan plans to strengthen its mechanism for reviewing inbound investment based on national security risks.” The nuclear project was just one of many agreements signed during Takaichi’s visit. Others related to critical minerals, science, technology, space, defence. “The two sides will coordinate in third countries to address challenges posed by strategic competitors and rogue states,” the White House concluded.
