Why did Takashi Hamada’s first visit to the United States focus on securing a $40 billion investment in small modular reactors (SMRs)?

SMRs could become the primary power source for AI-era data centers and AI computing infrastructure. SMRs’ greatest advantages include short construction timelines, small individual unit capacity, distributed deployment capability, and lower costs compared to conventional nuclear power plants. The enormous electricity demand from AI data centers serves as a powerful catalyst for SMR commercialization. Coincidentally, U.S. electricity demand is surging—especially driven by AI and data centers—creating urgent demand for new power sources. Technology companies have already begun signing power purchase agreements to prevent electricity shortages. Tech giants require stable, 24/7, zero-carbon energy to support expanding computing capacity—and SMRs precisely meet this need, potentially becoming the ‘standard’ power supply for data centers. Key application areas for SMRs include powering data centers, supporting AI computing, producing hydrogen, desalinating seawater, and supplying electricity to remote regions. Additionally, SMRs can be deployed for industrial process heat and large-scale low-carbon hydrogen production—expanding the boundaries of nuclear energy applications. Consequently, SMRs are viewed as the next-generation baseload power source. SMRs may hold even greater strategic value for military use—potentially achieving breakthroughs in defense applications before civilian ones. Modern forward operating bases rely heavily on electricity. Traditionally, diesel generators fulfill this need—but fuel transport convoys are highly vulnerable to attack on the battlefield, and casualties among logistics personnel often constitute a large proportion of overall combat losses. The U.S. Department of Defense has launched the ‘Pele Program,’ aiming to develop mobile microreactors transportable by C-17 cargo aircraft. These reactors can be rapidly deployed in field conditions, deliver several megawatts of continuous power, and operate for up to ten years without refueling. This would fundamentally resolve frontline energy security challenges, drastically reduce fuel transport convoys, directly save soldiers’ lives, and reshape battlefield logistics. Accordingly, the U.S. military has consistently supported SMR R&D, viewing small nuclear reactors as wartime secure power sources. SMRs could become the optimal solution for powering next-generation naval bases, supporting nuclear submarines, energizing polar research stations, ensuring independent wartime energy supplies, and powering nuclear weapons manufacturing facilities. They are applicable to forward-deployed bases, theater-level energy systems, strategic infrastructure, nuclear-powered fleet propulsion support, space-based energy systems, and military-industrial energy needs. Third, Japan’s investment in SMRs may be a strategic move to acquire advanced technology through capital investment. Japanese firms play a pivotal role in this collaboration. Mitsubishi Heavy Industries and Toshiba are involved in Westinghouse Electric’s large-scale nuclear reactor projects in the U.S. More significantly, Korean firms—including SK Innovation and Korea Hydro & Nuclear Power—have become major shareholders of TerraPower through investment, and plan to leverage their expertise in energy and nuclear plant construction to establish an SMR ecosystem in the U.S. tailored specifically for data centers. As early investors and partners in U.S. SMR technology, Japanese and Korean enterprises are highly likely to reverse-import mature SMR technologies and business models into their home markets—or jointly expand into global markets. Japan’s investment in U.S. SMR nuclear reactor projects, though requiring substantial cash outlays, enables Japanese firms—through joint investment and construction with GE Vernova—to gain early access to critical SMR technologies. It would be straightforward to introduce SMR technology into Japan’s civilian energy supply sector via licensing agreements—and such technology could also potentially be applied to Japanese defense programs. Japan’s motivations for this move are clear: First, nuclear power faces regulatory constraints.

Overseas | The Global Power Market Landscape Is Changing: Japanese Media Report That Chinese Enterprises Are Rising

According to a report published on the Nikkei Asia website on December 13, Hitachi Ltd. has entered final negotiations regarding the acquisition of ABB’s power systems division. It is reported that ABB’s grid-related businesses—including transmission and distribution—which it plans to divest, generated approximately $1 billion (roughly RMB 6.905 billion) in adjusted EBITA (earnings before interest, taxes, depreciation, and amortization) in 2017, representing a profit margin of 10.3% of sales—a relatively high level. However, this margin falls short of the 15% threshold achieved by ABB’s other three core businesses, such as industrial robotics, contributing to sluggish stock performance and prompting shareholder investment funds to offload shares. The report notes that the global power market’s competitive landscape is undergoing transformation. For Western industrial giants like General Electric and Germany’s Siemens, environmental concerns have created headwinds for thermal power generation businesses—leading to weak performance and downward pressure on share prices. Siemens, for instance, plans to scale back its thermal turbine business—where demand has sharply declined—and instead focus on higher-margin sectors such as factory digitalization. Conversely, since the Fukushima Daiichi nuclear disaster, Hitachi’s domestic nuclear power business has performed poorly; revitalizing its power and energy business has thus become an urgent priority. The report states that Hitachi’s first objective in acquiring ABB’s power systems business is to integrate it with Hitachi’s information and communications systems division—which accounts for over 20% of Hitachi’s total sales—to enhance profitability across both segments. Hitachi believes it can formulate a growth strategy that ABB—whose information systems capabilities are comparatively weak—is unable to realize independently. Its second objective is to globalize its power business, focusing particularly on emerging-market countries. ▲ State Grid Corporation deploys power line inspection robots in Anhui Province. (Source: China Daily) According to the report, power infrastructure development will accelerate rapidly in emerging-market countries, while demand for renewable energy sources—including solar and wind power—will also grow substantially. Currently, achieving universal access to electricity remains extremely challenging worldwide. By 2030, approximately 675 million people will still lack electricity access—90% of them residing in sub-Saharan Africa. Meanwhile, around 2.3 billion people will continue relying on biomass fuels, coal, or kerosene for cooking.

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