Microsoft has unveiled plans for more than $10bn in investment in Portugal's AI infrastructure, making it one of the “largest AI investment projects” in Europe.

The investment will see Microsoft, in collaboration with UK-based Nscale, chipmaker Nvidia and Portugal’s Start Campus, install 12,600 next-generation NVIDIA graphics processing units (GPUs) in Sines, situated 150km (93 miles) south of Lisbon.

Start Campus, backed by US investment fund Davidson Kempner and UK-based Pioneer Point Partners, also announced earlier this year an €8.5bn ($9.9bn) plan to develop a data centre hub in Sines by 2030. One of six planned buildings is already operational.

Microsoft's president and vice-chair Brad Smith was quoted by Reuters as saying: "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."

According to the news agency, Portugal is planning significant investment projects in Sines aimed at generating green energy to supply power for energy-intensive data centres.

The country's Atlantic coast provides a strategic location for subsea cables that link Africa, Europe and the Americas, serving as a key foundation for global internet connectivity.

In October, the tech giant signed a multi-year agreement to lease space at the Sines location. This move is part of efforts to scale up computing infrastructure in response to growing demand for AI services, according to Bloomberg.

The company is also reportedly planning to lease capacity from Nscale in Norway and the UK.

Microsoft recently revealed plans to grow its investment in the United Arab Emirates to $15.2bn (Dh55.82bn) by the end of 2029, concentrating on projects involving AI and cloud computing.