October 28, 2025
A landmark $550 billion investment package from Japan is set to significantly benefit the United States' data center industry, US Commerce Secretary Howard Lutnick confirmed in an interview published on October 29, 2025.
Secretary Lutnick, who is currently in Japan with President Donald Trump, told Nikkei that the investment framework would target critical American infrastructure, with a substantial portion directed toward sectors foundational to data centers. He stated the funds would be invested in “power, pipelines… things that are fundamental to national security and have virtually no risk.”
The investment aligns with a strategic trade and investment agreement finalized on July 22, which the White House said would target “the revitalization of America’s strategic industrial base.” Key commitments from the deal that are critical to the data center industry include bolstering energy infrastructure—with a focus on natural gas, advanced fuels, and grid modernization—as well as expanding semiconductor manufacturing and securing supply chains for critical minerals.
Lutnick emphasized that more than half of the Japanese investment may be directed towards electricity and energy development. He specified that Japanese companies would supply essential equipment such as gas turbines, transformers, and cooling systems to help expand American electricity generation capacity. This expansion is urgently needed to accommodate a massive surge in power demand from data centers.
Despite the cooperative investment, Secretary Lutnick affirmed that the 15 percent tariff on Japanese semiconductors would remain in place. This rate was established in the July agreement, representing a significant decrease from the 25 percent tariff initially announced by President Trump. The current levy on Japan is lower than those applied to other Asian partners, including Taiwan (20 percent), Thailand (19 percent), and the Philippines (19 percent). Tariffs are typically paid by the importing entity, not the exporting country.
The Commerce Secretary's comments underscore a broader governmental push to modernize and expand the U.S. electrical grid to support the rapidly growing data center industry. A recent report by S&P Global estimated that data centers in the US will require triple the amount of grid-based power by 2030 compared to 2024 levels.
In a related move last week, the US government urged the Federal Energy Regulatory Commission (FERC) to expedite the grid connection process for large data center projects. The proposal calls for limiting the review period for certain applications to 60 days, a stark contrast to the current process, which can sometimes take up to a decade in congested jurisdictions.
SOURCE DCD
