By Laila Kearney
NEW YORK (Reuters) -Hitachi plans to invest $1 billion to expand its U.S. power grid infrastructure manufacturing, its energy unit said on Thursday, as the country faces record electricity demand from Big Tech's build-out of AI data centers.
Hitachi's announcement follows a push by the administration of U.S. President Donald Trump to dramatically increase electricity supply for the rapid expansion of artificial intelligence, which is being developed in energy-intensive data centers
around the globe.
"If we are going to win the AI race, reindustrialize, and keep the lights on, America is going to need a lot more reliable energy,” U.S. Energy Secretary Chris Wright said in a statement. “Thankfully, Hitachi is delivering."
The U.S. holds the biggest concentration in the world of data centers, which are expected to triple their energy use to consume about 12% of the domestic power supply in less than three years. As a result, many utilities are ramping up spending on the long-stagnating electrical grid.
Nearly half of Hitachi Energy's latest investment, or $457 million, will go towards building a new facility in South Boston, Virginia, to manufacture large power transformers. The facility will be the biggest U.S. producer of the massive transformers, which can run as large as a two-story home, Hitachi said.
Construction of the project is set to begin this year, with service to begin by 2028, the company said.
"Bringing production of large power transformers to the U.S. is critical to building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks," said Andreas Schierenbeck, CEO of Hitachi Energy, which is a subsidiary of Japan's Hitachi Ltd.
Transformers, which help transport electricity, have been in short supply since the COVID-19 pandemic disrupted global supply chains.
Hitachi, which produces other types of electrical equipment in the U.S., including breakers and switchgear, is also investing in its facilities near Pittsburgh, Pennsylvania.
The U.S. investments are part of more than $9 billion Hitachi is deploying globally, in part to expand its manufacturing capacity.
A Hitachi spokesperson said the company has received a commitment from the White House around expediting the development of new manufacturing production capacity for power components.
Without elaborating, the spokesperson also said that Hitachi is working together closely with the White House on various other initiatives.
(Reporting by Laila Kearney; Editing by Christopher Cushing)
