Portugal´s AI and IT Industries: The Immediate Prospects

Over the past year, I have written for The Portugal News several essays which have tracked our country´s uneasy courtship of foreign investment to aid its progress as a “gateway” to the EU in the digital era. These have examined closely the implications posed by the projects for the construction of thirty data centres led by the massive buildings intended for the Sines Industrial Park.

By Roberto Cavaleiro , in Opinion · 29 Sep 2026, 07:01 · 0 Comments

Credits: envato elements; Author: FotoFeast;

Many new pressures caused by geopolitical conflicts and a stampede of financial interest in the expansion of Artificial Intelligence have caused the alteration of previous convictions while much confusing misinformation has been disseminated by both influencers and detractors. This essay endeavours to summarise these differing opinions so that those now attending the Atlantic Convergence Conference 2026 in Lisbon may form a better prognosis for our immediate future.

In the early days, salesmen of PCs were fond of stating that their machines were essential for understanding that “the sum of human knowledge is doubling every five years”. Risible at the time, this now seems an understatement for the scale of what is to be expected by the application of AI to every facet of living.

In An Overview dated October 2025 I noted that the industry´s new units of measurement – petabyte, zettabyte and yottabyte – would soon be redundant and this has swiftly proved to be the case. The magnitude of the infrastructure which will be needed to accommodate the infinity of data required by forthcoming super AI is incalculable. What we term now as “massive” will be dwarfed by the cyber-cities which are forecast by the likes of Altman and Zukerberg to be vital for housing their boundless creations.

The explosion of such “facilities” will place an enormous burden on the existing energy and water grids which, even with the expansion of “renewables”, is trying to cope in the present decade with the demands for improved resources by an ever-growing population. With the added threat of climate change bringing droughts, intolerable heat and much higher bills for energy, standards of living, already fragile, will fall with resultant civil unrest.

Uneasy anticipation of these future trials and tribulations, has caused a backlash in the USA where several states have halted planning processes for data centres and fossil fuelled power plants. Many citizens are now questioning why we need to go beyond the great achievements already made by AI which can collate data on all forms of human activity to the greater benefit of fields ranging from health-care and scholarship to the controlled exploitation of the planet´s remaining resources.

However, the nuts and bolts of hardware installation are overridden by political and security considerations related to the software which has become ubiquitous to practically all countries but without any consensus for regulation to achieve both good husbandry and peaceful application.

Alliances of nations limited to geographical limitations are now becoming as much a thing of the past as the existence of grand armies of foot soldiers to enforce them. Vulnerability to attack lies primarily with the protection of communications and the Cloud data which is stored in the processors of the thousands of data centres across the planet.

Theoretically, such data is subject to regulation and taxation by the sovereignty of the country in which the holding centre is located but, practically, it is owned by whichever of the titans provides the operating system.

For example, the routes of the fibre optic cable of the BRICS alliance are continuously subject to the surveillance and tapping of NATO forces. The routes of the western allies are inspected and sometimes sabotaged by members of BRICS. Both sides employ submarines and underwater drones with sophisticated capabilities and are prepared for limited armed conflict.

Yet the “sides” are becoming more difficult to define as the geopolitical system splits into multi-factions. The withdrawal of the USA from NATO seems ever more likely. Relations between Russia and China are tenuous. Japan and Germany, both world leaders in high-tech, still feel the ignominy of their deeds in WW2 and continue with obeisance to the USA. Britain is isolated from a fractious EU. All fear the impending digital unknown of superior AI and speculate on forms of how to benefit from new developments while protecting obvious sovereign vulnerabilities.

Speculation concerning the role of the “magnificent seven” U.S. and their counterpart Chinese companies is troubled by the power potential of entities which hold capital valuations that are greater than many national economies. They possess a combined technical knowledge which supercedes that of the countries within which they are domiciled. Indeed, each is comparable to a polis of ancient Greece with its own governance and policies for both war and peace.

My essays “Fibre Optic Cables – The Gathering Digital Storm” and “EU - Cyber Independence Under Assault” (TPN 05 and 25 July) partially covered this ground. But they ignored the problem which only a superiority to human intelligence can resolve. In what form can moral control be achieved by humankind over machines which have an amoral and immortal new conception of life on this planet?

If, for the immediate future, Portugal wishes to be more than a tolerated tenant in someone else´s digital empire, it needs to quickly resolve the three basic issues: (1) who will pay for the extensive new energy requirements, (2) who will maintain the security for land installations and underwater cables and (3) who will benefit from the revenue derived from software.