ac servo. thats one of the things i plan on doing. trouble is the servos cost alot and often arent super fast. best deal ive seen is a teco 750w model from machmotion for $680ish with drive. thats 1hp from 3000 to 3750rpm. so 6000-7500rpm with a 2:1 pulley. probably a decent size for this mill keeping in mind that there is intermittent power up to 2hp for a minute or 2 and "oops" power to 3hp for several seconds (depends on cooling and other factors). this is also a small 80mm motor which will fit very easily under the cover on the grizzly mill and even the smaller wmd16v i got.
i think hoss has done this, so he can contradict me, but as my understanding goes: you set mach's spindle to step and direction, and put it on the same output pins as the C axis. m3 makes the spindle run continuously, c axis commands coordinate it for rigid tapping - which you have to write your own little program of course.