Japan's largest power generator, JERA — the joint venture of Tokyo Electric Company (TEPCO) and Chubu Electric Power — has agreed to build a hyperscale AI data center next to one of its gas-fired plants in Chiba, in a project expected to cost more than $15 billion and backed by financing from Apollo Global Management.

Under a memorandum of understanding — the early-stage framework that typically precedes definitive contracts — signed and announced Thursday, JERA, Dell Technologies and UK developer RHAELM agreed to create a standardized template for building AI infrastructure across Japan, beginning at JERA's Chiba Thermal Power Station. Apollo, one of the largest US alternative asset managers, intends to act as RHAELM's strategic investment and financing partner on that first site.

The project ranks among the latest mega data center developments in Japan funded by outside capital, as reported by The Japan Times, underscoring how foreign money is flowing into the country's AI infrastructure build-out.

Power next door, not the grid

Siting the facility beside an existing thermal plant comes down to electricity and how long it takes to obtain. AI hardware concentrates electricity demand far more intensely than conventional computing, and power access has become the decisive constraint on where new data center capacity can be built. In Tokyo, new grid connections can take five to 10 years, a wait that has repeatedly stalled data center projects even after funding is committed — a bottleneck highlighted in a January 2026 review Japan's power crisis and the hyperscaler investment wave. 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 for a grid hookup — an option that exists because the site stands beside the plant, in Chiba on Tokyo Bay just east of the Greater Tokyo demand that JERA already supplies. Operations are targeted to begin in phases around 2028, and the data center is expected to reach full capacity in 2029, with JERA supplying electricity under a contract running 15 to 25 years.

The company says it generates roughly a third of Japan's power and supplies nearly all of the electricity consumed in Greater Tokyo.

Roles, scale and a long-term power deal

RHAELM will develop, build, operate and finance the data center, while Dell Technologies will contribute its AI hardware. The site is sized for up to 400 megawatts, and JERA says that at that scale it would be the largest single-site AI deployment in Japan and one of the biggest in Asia.

The 15- to 25-year power agreement locks in the single largest running cost in data center construction while handing JERA a guaranteed buyer for years. As a memorandum rather than a definitive contract, Thursday's agreement leaves the steps between now and the targeted 2028 start — financing, construction and the phased rollout RHAELM is set to build — as the measure of whether the template holds. If the Chiba facility is completed smoothly, JERA and RHAELM say they want to replicate the model at other JERA sites, with an ambition of delivering multi-gigawatt AI capacity across Japan by the 2030s.

The initiative aligns with Tokyo's “Watt-Bit Collaboration,” a policy effort 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 to the company's reach across the LNG value chain.

US investors expand into Japan

Apollo's role at Chiba adds another large US investor to the list of firms expanding into the country. In June, Blackstone President Jonathan Gray said the firm plans to invest $30 billion in Japanese AI data centers over three to five years, according to an interview with Nikkei Asia.

Also in June, Cryptopolitan reported that Digital Minister Hisashi Matsumoto warned the country risks becoming an “AI colony” if it cannot close the early lead that the US and China have built in computing.