The project, in partnership with British firm Nscale, which specialises in AI data centres, and with Start Campus, which has begun construction of a major data centre near the southern port of Sines, will see Microsoft install 12,600 of Nvidia’s latest-generation chips.

The company in a statement termed the scheme “one of the largest investments in AI computing capacity in Europe”.

In an interview with the Portuguese business daily Jornal de Negocios, Microsoft President Brad Smith said Portugal has emerged as a key European destination for data centre construction and investment.

Smith is currently in Lisbon for the Web Summit, a key annual event in the hi-tech calendar, dubbed “Davos for geeks”.

In addition to a data centre powered by renewable energy, the Sines site has the advantage of being a link point for important submarine telecommunications cables linking the Americas to Europe.

Regarding data centres, “demand in the AI field, particularly over the last five months, has become quite crazy,” Nscale’s product director, Daniel Bathurst, told AFP.

For a player like Microsoft, “it’s a race against time,” he added.

“We have the expertise, we have access to the energy, and we can implement this for them on time,” he added in an interview on the sidelines of the Web Summit.