Portugal’s New AI² Agency to Streamline Grants and Fund Innovation

Portugal’s science establishment is about to undergo its most sweeping overhaul in two decades. A brand-new Agency for Research and Innovation (AI²) will replace two long-standing bodies and, if all goes to plan, funnel billions of euros into laboratories and start-ups while cutting red tape that has long frustrated investigators. Supporters see a once-in-a-generation chance to place Portuguese science on par with Europe’s elite; critics warn of governance blind spots that could sap momentum before the agency even opens its doors.

Fast Facts Europeans in Portugal Should Know

• AI² goes live: 1 January 2026

• Budget envelope: several €billions over 5 years (precise figure due mid-2026)

• Parent bodies merged: Foundation for Science & Technology (FCT) + National Innovation Agency (ANI)

• Primary mission: finance the full life-cycle of ideas, from campus to factory floor

• Strategic anchors: talent, infrastructure, high-risk R&D

• First calls for projects: expected early Q2 2026

• Key worry: opaque governance framework, say university leaders

Why Dismantle the Old Structure Now?

Lisbon’s economic planners argue that Portugal still punches below its weight on the European innovation scoreboard. Fragmented funding, overlapping programmes, and multi-year payment gaps have slowed down patent filings and high-tech job creation. By bundling the once separate basic-science (FCT) and applied-innovation (ANI) streams into a single public-enterprise entity, officials hope to create a “one-stop shop” able to issue grants, equity stakes and tax-credit certificates under the same roof. Minister Fernando Alexandre calls the merger a chance to align research excellence with industrial competitiveness—a priority as the country seeks to lift R&D outlays from 1.7 % of GDP toward the EU’s 3 % target.

What Will the New Agency Actually Do?

AI² is mandated to oversee the entire innovation chain. That spans doctoral fellowships, proof-of-concept grants, scale-up vouchers, and public-private missions in areas such as hydrogen, quantum tech, agro-biotech and ocean sustainability. A slimmed-down board—capped at seven members—will sign multi-annual contracts with each “Strategic Domain”: pre-committed funding pools designed to guarantee predictability and reduced paperwork for research teams. Importantly, AI² can hire international programme directors on private-sector salaries, a move officials insist will make Portugal more attractive to global talent.

The Money Question

While parliament still parses the updated Science Law, the finance ministry has pencilled in “several thousand million euros” for the first quinquennium. Roughly 60 % should flow to competitive calls; the remainder will cover institutional base funding, high-risk “moonshot” projects, and co-financing under Horizon Europe 2025-27. Universities welcome the idea of five-year envelopes—a break from the annual scramble—yet caution that inflation and currency swings could erode real purchasing power if indexation clauses are not built in.

Cheerleaders, Skeptics and the Fine Print

• University rectors call AI² a “decisive turning point” provided academic freedom remains sacrosanct.• The Council of Associated Laboratories demands a fully public draft of the agency’s statute before year-end, flagging risks of staff attrition if job terms grow murky.• Start-ups in Porto and Braga see upside in a single portal for grants and venture co-investment, but warn that past national programmes were “slow to reimburse,” crippling cash flow.• Environmental NGOs fear that mission-oriented funding could steer resources away from curiosity-driven science, undermining blue-skies discovery.

Learning from the Best (and Avoiding Their Pitfalls)

Portuguese drafters pored over at least four reference models: Germany’s Fraunhofer-Gesellschaft for its market pull, the US ARPA-E for bold, high-risk bets, Britain’s Innovate UK for ecosystem orchestration, and Ireland’s Enterprise Ireland for its SME focus. Common lessons leap out:

• Agility beats bureaucracy—empower programme managers to scrap under-performing projects.

• Co-funding with industry ensures commercial traction.

• Clear success metrics—from patent counts to CO₂ abatement—keep politics from drifting.

• Gender and regional parity should be baked into evaluation panels.

What Changes for Researchers on 1 January?

The practical impact will be immediate in grant paperwork. A single, digital case file will track a proposal from review to contract to audit, replacing parallel portals that seldom synced. Legacy calls already launched by FCT or ANI will be grandfathered into AI² with no loss of funding, officials promise. Post-docs should watch for a new mobility stipend encouraging secondments in European institutes, while spin-outs can apply for €75 k “Deep Tech Vouchers” slated for March.

How to Plug In—and What to Watch Next

Researchers eager to shape the rulebook can still submit feedback through the public-consultation portal until mid-January. Meanwhile, eyes remain on three pending milestones:

Publication of the decree-law in Diário da República (expected within weeks).

Appointment of the executive board, rumoured to include at least two non-Portuguese scientists.

Release of the first strategic-domain list, which will signal where big money is heading.

If the timeline holds, grant dashboards should light up by early spring, and Portugal’s labs—and the industries that rely on them—will finally see whether AI² is the catalyst its architects promise or merely another acronym in a crowded field of agencies. For now, the stakes are clear: turn bold ideas into export-ready products, or risk watching the next wave of tech breakthroughs sail past the Iberian Peninsula.