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Microsoft to Invest US$10 Billion in New AI Data Center in Portugal

Microsoft

Business Honor
12 November, 2025

Microsoft collaborates with Start Campus and Nscale to build Europe’s largest AI data hub on Portugal’s Atlantic coast.

Microsoft has announced that it will develop a US$10 billion artificial intelligence (AI) data center on the Portuguese coast, representing its largest investment in Europe this year, according to the company. The figure applies to a data center park in Sines, approximately 150 km south of Lisbon, that Microsoft is co-developing with Start Campus, a Portuguese developer, and the British start-up Nscale. Microsoft president Brad Smith first disclosed the announcement at Jornal de Negocios during a news conference at the Web Summit in the Portuguese capital. A Microsoft spokesperson confirmed the US$10 billion but could not comment further on the project. A Start Campus spokesperson stated that the US$10 billion construction cost related to negotiations for the next phase of the construction after it opened the first of six planned buildings in March. Microsoft had already secured a multi-year leasing agreement to use capacity at the Sines data center in October. The company is now expanding its computing infrastructure to meet the increasing demand for AI services.

Dealing with capacity restraints, Microsoft recently inked agreements with several “neocloud” providers, companies supporting high-performance compute capacity in the cloud, including CoreWeave and Nebius Group. The company intends to lease capacity from Nscale in Norway and the UK. Sines, a port town of approximately 15,000 populations, is emerging as a key investment area in Portugal, with undersea cables to Brazil and Africa, and Google a forthcoming line to South Carolina. China's CALB Group broke ground on a battery factory in May, with 2 billion euros (S$3.01 billion) while Sines is also proposed as Portugal's site for a European-backed AI "gigafactory."

With a partnership with Nscale, NVIDIA, and Start Campus that strengthens national infrastructure for AI, we are using that to help position Portugal as a benchmark for responsible AI development at scale in Europe, said Brad Smith, Microsoft's Vice Chair and President. Portugal's location on the Atlantic coast provides a unique landing point for subsea cables connecting Europe to Africa and the Americas, increasing the significant role it plays as an asset in global data and internet connectivity.