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Microsoft is investing $10B to build an AI data center hub in Sines, Portugal, partnering with Start Campus and Nscale to power Europe’s AI future.
Microsoft has announced plans to invest $10 billion into building a state-of-the-art AI data center hub in Sines, Portugal, marking one of its biggest European investments yet.
The project, revealed by Microsoft’s Vice Chair and President Brad Smith during the Web Summit in Lisbon, will see the company partner with Start Campus, a Portuguese infrastructure developer, and British AI infrastructure company Nscale to expand a next-generation data center park.
“This is larger than all the data centre investments the company has ever made in Spain,” Brad Smith told Jornal de Negócios newspaper. “We are investing $10 billion in Portugal, in Sines, with Start Campus and Nscale.”
Sines, a small coastal city about 150 kilometers south of Lisbon, is fast becoming a magnet for tech and energy investments. The town already hosts critical undersea cables linking Europe to Africa and the Americas, giving it a powerful edge in global connectivity.
Microsoft’s partner, Start Campus, which Davidson Kempner and Pioneer Point Partners back, previously announced plans to invest up to €8.5 billion ($9.9 billion) in the region by 2030. The first of six planned buildings for the data hub is already operational.
Smith described Sines as a “very important and attractive country in Europe for the construction of this type of data centre,” crediting Portugal’s affordable energy, favorable climate, and strong broadband infrastructure as key factors.
Microsoft isn’t just adding more servers, it’s building what it calls an AI gigafactory. The Sines hub will be equipped with 12,600 next-generation NVIDIA GPUs, enabling large-scale AI model training and cloud computing for its Azure customers.
“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,” Smith said, per Reuters.
This capacity expansion is vital for Microsoft, which has been seeking new avenues to meet the explosive demand for its AI services, particularly since the launch of generative AI applications like ChatGPT in 2022.
Facing capacity shortages, the company has recently signed agreements with several “neocloud” providers, including CoreWeave and Nebius. It has also leased capacity from Nscale in countries such as Norway and the UK.
For Sines, the investment follows other large-scale projects, including China’s CALB Group Co.’s ongoing construction of a €2 billion battery factory, further cementing the area’s role as a major industrial and digital hub in Europe.
Don’t miss this insightful follow-up: check out the piece on Meta’s $600 billion AI data-center expansion and what it means for the future of enterprise infrastructure.
Aminu Abdullahi is a B2C and B2B technology and finance writer with more than six years of experience covering enterprise IT, cybersecurity, cloud computing, artificial intelligence, fintech, business software, and emerging technologies. His work has appeared in publications including TechRepublic, eWEEK, Channel Insider, Geekflare, Enterprise Networking Planet, eSecurity Planet, CIO Insight, and Webopedia. With a technical background in computer science, he specializes in translating complex technology topics into clear, accessible content for business leaders and decision-makers.
