Nvidia joins Portuguese consortium to bring AI gigafactory to Sines

Nvidia is part of the Portuguese consortium that will compete to bring an artificial intelligence (AI) gigafactory to Portugal. A source familiar with the process confirmed to ECO that the graphics processors giant is involved in the Portuguese bid, days after Banco de Fomento CEO Gonçalo Regalado dropped hints at an event in Lisbon that pointed to the American company’s involvement.

“I can tell you that we have the will and we have the agreement and the biggest global players behind the bid, and the 100,000 GPUs [graphics cards] are guaranteed for the factory to be built in Sines”, said Gonçalo Regalado during a speech at the Fusion conference, organised by Devoteam. The CEO of Banco de Fomento also said that he had “a very strong consortium of national and international private partners”.

When confronted by ECO with this information, an official source at Nvidia declined to comment, and an official source at Banco de Fomento also made no comment. However, the involvement of the American company is very important news for Portugal’s ambition to attract a gigafactory to Sines, given that it produces the graphics cards needed to build this mega data centre on the Alentejo coast, which is expected to employ 270 people. It is estimated that each Nvidia H100 graphics card costs around €22,000, as reported by ECO.

Nvidia’s participation, in a model that could not be confirmed, also helps to lend credibility to the Portuguese proposal when the official tender is launched by the European Commission. This is expected to happen at the end of the year, during the fourth quarter.

The consortium being set up by Banco de Fomento involves a project that could reach €4 billion, with part of this amount being financed by the EU Executive. However, the country is competing with other Member States to try to attract one of the five AI gigafactories that Brussels intends to co-finance under a Public-Private Partnership (PPP) scheme.

According to Gonçalo Regalado, the Portuguese proposal also has “the institutional support of the government and civil society”.

Nvidia also supports bid in Spain

In addition to participating in the Portuguese bid, Nvidia is also supporting a Spanish bid, according to various media outlets in the neighbouring country, to set up an AI gigafactory in Móra la Nova, Tarragona. This Spanish consortium, which includes major companies from the technology and industrial sectors, has been formally submitted to the European Commission under the AI gigafactories programme, and Nvidia’s presence guarantees the supply of the chips needed to power the large-scale AI infrastructure.

At the same event last week, Gonçalo Regalado stated that Portugal is not competing “against anyone” in this race: “We are fighting for ourselves”. But, referring to the neighbouring country, seen in some circles as Portugal’s competitor in this European programme, he pointed out: “While in Spain there are four applications, which are completely in competition with each other, we have taken the decision to make one application and bring everyone on board”, he stressed.

Meanwhile, in Germany, Nvidia is also involved in another project with Deutsche Telekom and the Brookfield fund to develop an ‘Industrial AI Cloud,’ a large-scale initiative that aims to build AI capabilities with around 100,000 graphics cards. Although this project is still in the planning stage and has not been officially confirmed as a formal application to the European programme, it represents an important strategic investment by Nvidia in the development of AI infrastructure on the European continent.

The five AI gigafactories that the European Commission intends to bring to fruition in the coming years could represent a total investment of around €20 billion, according to the institution. This is the amount envisaged in the InvestAI programme, which was announced in February by European Commission President Ursula von der Leyen. The InvestAI programme as a whole envisages the mobilisation of €200 billion of investment in AI over the coming years, but of this amount, only €50 billion corresponds to investment from European funds.

As for Nvidia — currently the largest company in the S&P 500 in terms of market value, valued at $4.46 trillion — it continues to invest heavily. On Monday, it was also reported that it plans to invest up to $100 billion in OpenAI, creator of ChatGPT, and last week it also signed an agreement to acquire a stake in Intel.