Portugal Bets Big on Data Centers and Tech to Diversify Beyond Tourism in 2025

• Why Is Portugal Shifting from Tourism to Tech?
• How Does Sines’ Industrial Past Shape Its Tech Future?
• What’s Driving Foreign Investment in Sines?
• Why Are Locals Skeptical?
• Can Portugal Balance Growth and Livability?
• What’s Next for Sines?
• FAQs

Portugal, long reliant on tourism, is now pivoting to tech and data centers to future-proof its economy. The coastal town of Sines is at the heart of this transformation, leveraging its strategic location and renewable energy to attract giants like Google, Microsoft, and Nvidia. But as billions pour in, locals remain skeptical—can Portugal avoid repeating past industrial missteps?

Why Is Portugal Shifting from Tourism to Tech?

Portugal’s sun-soaked beaches and surf spots have long been its economic backbone, drawing millions of tourists yearly. But in 2025, the government is doubling down on a new strategy: turning Sines into a European tech hub. The town’s deep-sea cables connect Europe, Africa, and the Americas, making it a prime spot for data traffic. With projects like the €8.5 billion Start Campus data center (set to be one of Europe’s largest), Portugal aims to reduce its dependence on seasonal tourism revenue. The first phase launched in March 2025, with Nvidia and Microsoft already signed on as tenants.

How Does Sines’ Industrial Past Shape Its Tech Future?

Sines’ history is a cautionary tale. In the 1970s, the government tried—and failed—to turn it into an industrial powerhouse after losing its colonies post-revolution. The old oil refinery still operates, but the coal plant shut down in 2021 as renewables became cheaper. Now, the same infrastructure—cooling systems, seawater pipes—is being repurposed for data centers. “It’s poetic,” says Pedro do Ramos, head of the port authority. “The tools of the old economy are powering the new one.”

What’s Driving Foreign Investment in Sines?

The government is pulling out all the stops. Alongside the Start Campus, a €2 billion Chinese-owned battery factory (CALB Group) and a port expansion are underway. Combined, these projects represent 4.6% of Portugal’s GDP and could create 5,000 jobs. To sweeten the deal, Lisbon offered CALB €350 million in subsidies. By 2028, the factory aims to produce batteries for 200,000 EVs annually. Singapore’s port authority is also doubling Sines’ cargo capacity to strengthen its Atlantic trade role.

Why Are Locals Skeptical?

Residents remember the 1970s boom-and-bust too well. “Workers flooded in, then left when projects stalled,” says Maria Silva, a lifelong Sines resident. Today, housing shortages and lagging infrastructure—like a delayed highway to Spain—fuel doubts. Freight trains still crawl, and passenger rail links are nonexistent. “They told us for years there wasn’t enough traffic to justify a highway,” Ramos admits. “Now, there’s too much.”

Can Portugal Balance Growth and Livability?

Economy Minister Manuel Castro Almeida calls Sines “the heart of Portugal’s economic transformation.” But locals worry growth will outpace quality of life. Schools and hospitals are stretched thin, and rents have spiked 30% since 2023. “We need more than just jobs,” Silva argues. “We need a town that works.”

What’s Next for Sines?

By 2030, Start Campus plans six renewable-powered data centers. The port expansion could make Sines a key Atlantic logistics node. But success hinges on fixing infrastructure—fast. “The potential is huge,” says Ramos. “But potential doesn’t pay bills.”

FAQs

How much is Portugal investing in Sines’ tech projects?

The Start Campus data center alone is worth €8.5 billion. Combined with the CALB battery factory and port upgrades, total investments exceed 4.6% of Portugal’s GDP.

Which tech companies are involved?

Microsoft and Nvidia have leased space at Start Campus. Google’s new undersea cable will link Sines to South Carolina by late 2025.

What are the risks?

Past industrial projects in Sines failed due to political shifts and poor planning. Locals fear history could repeat if infrastructure gaps aren’t addressed.