US and Japan Advance First Projects Under $550B Investment Pact
The United States and Japan are moving closer to launching the first wave of projects under their massive $550 billion bilateral investment framework, a cornerstone of a broader trade agreement between the two nations.
Key Takeaways
- The US and Japan are launching the first projects under their $550B investment framework.
- The initial phase, worth up to $44B, targets energy infrastructure and semiconductor supply chains.
- Major projects include AI data center power plants, a Gulf oil export terminal, and synthetic diamond production for chips.
- Final approval is expected ahead of a March summit between President Donald Trump and Prime Minister Sanae Takaichi.
The initial package, described as the “first phase,” is expected to carry a combined price tag of roughly $38 billion to $44 billion.
The focus is clear: energy security, advanced manufacturing, and supply chain resilience. Officials from both sides see these early projects as strategically important for long-term economic competitiveness and geopolitical stability.
Energy and Semiconductors Take Priority
At the center of the first phase is a roughly $40 billion initiative to build gas-fired power plants dedicated to powering AI-driven data centers across the United States. The project is being led by SoftBank Group, with involvement from GE Vernova and other Japanese firms handling transmission and distribution infrastructure. The goal is to secure reliable electricity supply for the rapidly expanding artificial intelligence ecosystem.
Another shortlisted project involves the construction of a deepwater crude oil export terminal in the Gulf of Mexico. Valued at around $2 billion, the facility would expand U.S. export capacity and strengthen energy trade flows to global partners, including Japan. The project reflects Washington’s broader strategy to solidify its position as a major energy supplier.
The third initiative targets semiconductor supply chains through the production of synthetic diamonds, a critical material used in advanced chip manufacturing and high-precision industrial components. Estimated at about $500 million, the plan includes Japanese firms purchasing diamonds produced at a U.S.-based facility built by De Beers. The move aims to reduce reliance on fragile global supply routes for key semiconductor inputs.
How the $550 Billion Framework Works
The broader $550 billion framework is scheduled to run through January 19, 2029. Oversight of project selection rests with U.S. Commerce Secretary Howard Lutnick, who chairs the investment committee, while final approval lies with President Donald Trump.
Under the agreed structure, profits from each project will initially be split evenly until Japan recovers its principal investment plus interest. After that threshold is met, profit distribution shifts heavily in favor of the United States, with a 90-10 split.
The funding will be managed by the Japan Bank for International Cooperation, using dollar-denominated bonds, government-backed loans, or foreign currency reserves. Notably, the agreement includes enforcement provisions: if Japan declines to participate in proposed projects, it could face higher U.S. tariffs, potentially rising from 15% to 25%.
Final Negotiations Underway
As of February 12, 2026, Japan’s Trade Minister Ryosei Akazawa is in Washington meeting with Lutnick to finalize the first batch of projects. A formal announcement is expected ahead of a planned summit in March between President Trump and Prime Minister Sanae Takaichi.
If confirmed, the launch of these three projects will mark the operational start of one of the largest bilateral investment commitments in modern history, signaling a deeper alignment between Washington and Tokyo in energy, AI infrastructure, and semiconductor strategy.
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