Microsoft plans to invest US$10 billion in Portuguese AI data hub

This file photo shows a sign for Microsoft offices. (AP Photo/Mark Lennihan)

LISBON — Microsoft plans to invest US$10 billion in artificial intelligence infrastructure at a data centre in Portugal’s port city of Sines over the next few years, marking one of the largest AI investment projects in Europe, it said on Tuesday.

The technology giant will work in partnership with developers Start Campus, AI infrastructure platform Nscale and chipmaker NVIDIA to deploy 12,600 next-generation NVIDIA Graphics Processing Units (GPUs) in Sines, 150 km (93 miles) south of Lisbon.

Start Campus, a venture between U.S. investment fund Davidson Kempner and Britain’s Pioneer Point Partners, in April announced a plan to invest 8.5 billion euros ($9.9 billion) by 2030 in a data centre hub to serve growing demand from major tech and AI companies.

One of the planned six buildings is already in operation.

“By strengthening the national AI infrastructure through collaboration with Nscale, NVIDIA, and Start Campus, we are helping to position Portugal as a benchmark for the responsible and scalable development of AI in Europe,” Microsoft’s Vice Chair and President Brad Smith said.

Portugal has large investment projects lined up for Sines to produce green energy to power energy-intensive data centres. Portugal’s Atlantic coastline positions it as a prime hub for subsea cables connecting Europe, Africa and the Americas and forming the backbone of the World Wide Web.

Investments in data centres, which help provide computing power for AI, have surged since OpenAI launched ChatGPT in 2022, as companies across sectors increasingly shift their operations to the cloud and integrate AI into their businesses.

(Reporting by Sergio Goncalves, Zaheer Kachwala in Bengaluru. Editing by Andrei Khalip and Mark Potter)