An Iberian proposal to develop a major artificial intelligence gigafactory would allocate €12 billion (US$13.7 billion) in funding equally between Portugal and Spain, according to Banco Português de Fomento (BPF) chief executive Gonçalo Regalado.

The joint bid, which is being prepared for submission to the European Commission, would see each country receive €6 billion (US$6.8 billion) if selected.

Regalado said the proposal has been structured on a parity basis between the two nations and would maintain independent management and governance arrangements in Portugal.

“€6 billion in Portugal and €6 billion in Spain. The application is balanced,” Regalado said.

The Portuguese component of the project is centred on Sines, which has emerged as the preferred location due to its connectivity and strategic role in international submarine cable infrastructure.

Additional facilities are being considered in Lisbon and Abrantes to provide redundancy and support the wider artificial intelligence ecosystem.

“We are working on the basis of Sines as the main hub, where we are directing all our efforts. It seems clearly to us that it is the best location in the country, with the strongest impact, the best connectivity and the best management of submarine cables,” Regalado said.

Asked whether the Portuguese facility would be hosted at Start Campus, Regalado said there were “solutions such as Start Campus and additional alternatives in Sines”.

He added that the project would require geographic redundancy, with infrastructure expected to be distributed across multiple locations.

“Certainly it will be done in other regions of the territory, in two additional regions: the urban area of Lisbon and the municipality of Abrantes,” he said, describing both locations as offering competitive advantages for the resilience of the proposed infrastructure.

According to Regalado, Portugal’s submission to Brussels will therefore include three locations as part of a broader effort to establish a national artificial intelligence hub.

“Portugal is working on the creation of an artificial intelligence industry hub, with three locations being studied, developed and presented to the European Commission. We are awaiting the launch of the final and formal European tender,” he said.

Regalado also stressed that the Portuguese component of the wider Iberian proposal would retain operational autonomy and national oversight.

“This is a proposal with autonomy and management independence,” he said. “We will have the AI Gigafactory in Portugal, managed by Portuguese people, with leadership in Portugal, management in Portugal, sovereignty in Portugal and a Portuguese security and cybersecurity dimension.”

The executive noted that Spain initially entered the process with four separate proposals before consolidating them into a single application capable of joining the Iberian consortium.

Regalado said the initiative began after discussions with the European Investment Bank in March 2025, when opportunities for sovereign-backed financing of AI gigafactory projects first became apparent.

“We started this journey alone. We attended a meeting at the European Investment Bank in March 2025 and realised there would be financing, together with sovereign banks, to support gigafactories that would eventually be regulated,” he said.

Portugal initially submitted an independent proposal before broader partnerships emerged, according to Regalado.

“When we submitted an application on behalf of Portugal, we realised there were 76 applications across Europe and only 20 had institutional support from a government or sovereign institution. Only 12 applications actually had all stakeholders united behind their country,” he said.

While the selection process remains ongoing, Regalado said a smaller group of proposals now appears to be emerging as frontrunners.

“At this stage, we see six consortia that appear to be the likely winners, and we believe Portugal will succeed, within the Iberian application, in achieving what nobody believed possible from the first day,” he said.

The European Commission has yet to formally launch the final stage of the competition, with participating countries awaiting further details on the selection process and funding allocation framework.