Microsoft is making a landmark $10 billion (€8.6 billion) investment in Portugal, solidifying the country’s position as a leading European hub for artificial intelligence (AI) infrastructure. The announcement, made at the Web Summit in Lisbon, signals a major bet on Portugal’s potential to become a central player in the rapidly expanding AI landscape.
Portugal as an AI Frontrunner
The investment will primarily fund a large-scale data center hub in Sines, a strategic location chosen for its connectivity and infrastructure. Microsoft, in partnership with Nscale, is already planning to install 12,600 advanced Nvidia graphics cards within the Start Campus facility, demonstrating an immediate commitment to high-performance computing.
This move isn’t just about capacity; it’s about positioning Portugal at the forefront of scalable, secure, and sustainable AI development in Europe. Microsoft anticipates doubling its data center capacity across 16 European countries by 2027, with Portugal taking a central role in this expansion.
Government Ambitions Align with Investment
The timing of this investment aligns with a broader government initiative to transform Portugal into a leading European AI hub. Deputy Minister for State Reform, Gonçalo Matias, announced a national strategy targeting over €16 billion in investment, with a key project – an AI gigafactory in Sines – currently under consideration by the European Commission.
This gigafactory, backed by Banco Português de Fomento, aims to attract approximately €4 billion in public and private funding. The government views AI as a critical economic driver, forecasting a potential impact of €2.3 trillion by 2030.
Strategic Advantages for AI Development
Portugal offers several key advantages that make it an attractive location for AI infrastructure. The country’s hyper-connected status, thanks to its extensive network of submarine cables, positions it as a major transcontinental connectivity hub. Lisbon, in particular, is among the most connected cities in the world.
Beyond infrastructure, Portugal boasts a highly skilled professional ecosystem, fostered through partnerships with world-class universities and innovation hubs. The government is also prioritizing data security through the development of a national sovereign cloud, ensuring independence and trust in AI operations.
Doubling Down on Data Centers
Microsoft’s investment is part of a wider trend of tech giants expanding data center capacity in Europe. The company’s commitment to doubling capacity across 16 countries by 2027 reflects the growing demand for AI-powered services and the need for robust infrastructure to support them.
Portugal’s strategic location, combined with government support and a skilled workforce, makes it an ideal destination for this expansion. The €16 billion national strategy, if approved, will further solidify Portugal’s position as a leading AI hub.
Portugal’s ability to attract such significant investment underscores its growing importance in the global AI landscape. The combination of infrastructure, talent, and government support positions the country for sustained growth in this critical sector
