Microsoft to invest more than $10 billion in AI infrastructure in Portugal

Microsoft plans to invest $10 billion dollars (more than €8.6 billion) in Portugal to expand its artificial intelligence (AI) infrastructure.

Brad Smith, Microsoft's president, said during the Web Summit in Lisbon that the investment will make Portugal a front-runner in Europe in the installation of AI gigafactories.

The technology giant said the funding will go toward a data centre hub in Sines. In October, Microsoft and Nscale announced that they would be the first tenants of the Start Campus building in Sines, with plans to install 12,600 state-of-the-art Nvidia graphics cards in the Sines Data Centre.

"We're investing $10 billion in Portugal, in Sines, with Start Campus and Nscale," Smith said in an interview with Jornal de Negócios.

The company said this is "one of the largest investments in AI computing capacity in Europe," positioning Portugal "as a leader in the development of scalable, secure and sustainable AI".

Microsoft said it "foresees doubling data centre capacity in 16 European countries by 2027".

Government wants to position Portugal as a 'leading European hub for AI gigafactories'

Microsoft's announcement comes amid a renewed government push on AI.

The government wants to position Portugal as a "leading European hub for AI gigafactories, with an estimated investment of over €16 billion," Gonçalo Matias, the country's deputy minister for state reform, said during the Web Summit.

Matias said the executive is "actively supporting the [Portuguese] bid for the AI gigafactory with the European Commission, uniting national and international technology companies to shape the future of AI in Europe".

If it gets the green light from Brussels, the project would be installed in Sines, involving an investment of around €4 billion, financed with public and private money.

It is being presented by Banco Português de Fomento, the Portuguese promotional bank.

Matias emphasised AI's role as a driver of the economy, with an expected impact of €2.3 trillion by 2030.

"The national strategy for data centres will bring tens of billions of euros of investment, while a national sovereign cloud will ensure independence, trust and security," he said, stressing that Portugal "offers a truly exceptional strategic position".

"It is a hyper-hub of submarine cables connecting the world, while Lisbon lists among the most connected transcontinental cities in the world. This connectivity is complemented by a highly professional ecosystem, built through partnerships with world-class innovation hub universities," he said.