Pune, India | November 12, 2025
In a decisive move, Microsoft Corporation announced it will invest US$10 billion to build a large AI data centre. Located near Sines, a port city in southern Portugal, the project represents one of Europe’s largest commitments to AI infrastructure. Consequently, the investment signals Microsoft’s growing focus on expanding its cloud and AI operations across the continent.
The company plans to develop the facility in collaboration with local data developer Start Campus. A UK-based AI infrastructure platform, Nscale, and chip manufacturer NVIDIA Corporation. The hub will host approximately 12,600 next-generation GPUs, enabling the deployment of advanced AI systems for both cloud services and enterprise workloads. Therefore, Microsoft expects the site to become a benchmark for scalable AI deployment.
Strategically situated around 150 kilometres south of Lisbon. Sines offers abundant renewable energy and subsea cable connections linking Europe, Africa, and the Americas. Consequently, Microsoft described the location as a “benchmark for responsible and scalable development of AI in Europe,” highlighting its strategic importance.
Start Campus had previously revealed that its Sines facility would include six buildings and feature over 1.2 gigawatts of IT capacity. Currently, one building is operational. This new collaboration builds on Start Campus’s earlier €8.5 billion investment commitment for the campus, projected through 2030.
Brad Smith, Microsoft’s Vice Chair and President, emphasised that the project strengthens national AI infrastructure through collaboration with Nscale, NVIDIA, and Start Campus. He also noted that it positions Portugal as a leader in Europe’s digital transformation. Furthermore, the initiative showcases Microsoft’s intent to integrate AI infrastructure strategically across key European regions.
Economically, the investment is expected to generate significant local employment opportunities. It enhances Portugal’s appeal as a hub for cloud and AI-driven projects. In response, the Portuguese government welcomed the announcement, describing it as a “historic moment” for the nation’s technology sector. Consequently, the project could catalyse additional investments and technological partnerships in the region.
From an energy perspective, the Sines facility leverages Portugal’s renewable energy resources and coastal location to power the energy-intensive centre sustainably. Microsoft and its partners emphasise low-carbon operations, reflecting a commitment to environmental responsibility. Moreover, the site demonstrates how AI infrastructure can align with climate-conscious energy policies.
The announcement also highlights the rapid growth of demand for AI computing and cloud services across Europe. Since ChatGPT’s launch in 2022, many companies have accelerated investments in data centres to support new AI workloads. Thus, Microsoft’s project responds to both technological necessity and market opportunity.
However, analysts caution that ultra-large-scale AI infrastructure projects involve risks, including regulatory scrutiny, rising energy costs, and competition from emerging trade blocs. Despite these challenges, Microsoft’s commitment to Portugal underscores confidence in Europe’s potential role in the global AI economy.
In the coming months, Microsoft, Start Campus, and Nscale plan to release detailed timelines, construction phases, and workforce training programmes. As development progresses, the Sines campus may evolve into a hub not only for cloud services but also for AI model training, data sovereignty, and regional digital ecosystem growth. Consequently, this initiative could reshape Portugal’s position in global AI infrastructure significantly.
Ultimately, Microsoft’s US$10 billion investment illustrates the intersection of technological ambition, sustainable energy, and strategic European growth. With collaborative partners and strong government support, the Sines hub promises to become a leading centre for responsible, scalable AI deployment across Europe and beyond.
