Government sees investment in AI gigafactory double to €8 billion

The Deputy Minister and Minister for State Reform has already admitted that the investment in the artificial intelligence (AI) gigafactory in Sines could double the initial estimate. According to Gonçalo Matias, the consortium has been growing significantly, so the amount invested in the gigafactory, if the Portuguese bid is selected, could be “significantly higher” than the initial €4 billion.

The minister responsible for AI in Portugal spoke to ECO on the sidelines of the 4th Talk .IA, after referring to the gigafactory as an investment of “around eight billion euros” during his speech at the conference — double the four billion euros included in the initial proposal.

When questioned about this figure, Gonçalo Matias explained the gigafactory consortium’s greater ambition. “I believe that the investment will be significantly higher than the €4 billion initially planned. I am very confident about the bid, I have been in contact with the European Commission about this process and I am convinced that the bid will be successful”, the Minister for State Reform told ECO.

To justify this heightened expectation, Gonçalo Matias pointed out that the increase in the number of consortium partners “is what allows us to believe that the value could be higher than initially predicted”, emphasising that most large Portuguese companies already support the national initiative to attract this mega data centre to Sines. In addition, the minister also acknowledged that “Nvidia is part of the consortium”, thus confirming a report by ECO in September.

The application to build the gigafactory in Sines is being prepared by Banco de Fomento and will be partly financed by the European Commission, with the country 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. 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, the institution has estimated.

At this moment, EuroHPC is expected to launch the formal application process for the gigafactories, following a period of dialogue with the EU Executive that followed the submission of preliminary proposals. The process was expected to start this year, in the last quarter, but is likely to be delayed until early 2026.

“There are important niches where we can lead”

Gonçalo Matias also argued at the 4th Talk.IA that Portugal has the conditions to lead in the digital economy. “It is clear that we are not going to replace China or the United States, that is not realistic. But there are important niches where we can lead”, he said, highlighting the growing demand for data centres and AI gigafactories in the country.

According to the minister, large investments, such as the one announced in Sines by Microsoft, of around €10 billion, and the European bid to set up an AI gigafactory show the country’s potential in this sector.

However, the minister criticised the country’s tendency to underestimate this type of project. “We are somewhat tempted to devalue these things. In Germany, which is Europe’s largest economy, similar investments are considered large, and yet they are still lower than those we have in Portugal”, he explained.

Gonçalo Matias also stressed that, although announced, these investments have not yet materialised, reinforcing that the government needs to create the right conditions for them to become a reality through ongoing reforms.