Microsoft to invest US$10 billion in Portugal AI data hub

[LISBON] Microsoft will spend US$10 billion on an artificial intelligence (AI) data centre along the Portuguese coast, marking one of its largest European investments this year, the company said.

The amount is planned for a data centre park in Sines, about 150 km south of Lisbon, that Microsoft is building with Start Campus, a Portuguese developer, and British startup Nscale.

Microsoft president Brad Smith first shared the funding plans with local newspaper Jornal de Negocios, at the Web Summit in the Portuguese capital.

A Microsoft spokesperson confirmed the funding amount, but declined to comment further.

A Start Campus representative said the US$10 billion figure aligns with ongoing talks on the next phase of development, after the company opened the first of six planned buildings in March.

Microsoft had already secured a multi-year deal in October, to lease capacity at the Sines site. The company is also expanding its computing infrastructure to meet surging demand for AI services.

Facing capacity shortages, Microsoft recently signed agreements with several “neocloud” providers – companies offering high-performance cloud computing – including CoreWeave and Nebius Group.

The firm plans to lease capacity from Nscale in Norway and the UK.

Sines, a coastal town of about 15,000 residents, is becoming a key investment hub in Portugal.

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The area hosts undersea cables linking Europe to Brazil and Africa, with Google soon adding a line to South Carolina.

In May, China’s CALB Group began construction on a 2-billion-euro (S$3.01 billion) battery factory, while Sines is also Portugal’s proposed site for an European Union-backed AI “gigafactory”. BLOOMBERG