Hong Kong’s AI Development: Opportunities and Challenges Amid Geopolitical Shifts
Image Credit: Ruslan Bardash | Splash
Hong Kong is striving to establish itself as a key player in artificial intelligence, with the city making significant investments in technology and infrastructure. However, geopolitical factors, including its proximity to mainland China and shifting international perceptions, are posing challenges to its aspirations.
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Advancing AI Through Infrastructure and Government Support
The Hong Kong Special Administrative Region (HKSAR) Government has been proactive in fostering an AI-friendly ecosystem. In the 2024-25 Budget, a substantial allocation of HK$3 billion was announced to launch a three-year subsidy scheme. This initiative primarily supports local universities, research institutes, and enterprises in leveraging the computing power of Cyberport’s AI Supercomputing Centre (AISC) to achieve scientific breakthroughs. Eligible users may receive subsidies covering up to 70% of the AISC's service list price.
Further emphasizing its commitment, the government issued the "Policy Statement on Responsible Application of Artificial Intelligence and Data Analytics in the Financial Services Sector" in October 2024. This statement underscores the importance of ethical AI deployment, aiming to balance innovation with consumer protection and data privacy.
Recognizing the critical role of computing power in AI development, Hong Kong has invested in high-performance computing infrastructure. The Hong Kong Science and Technology Parks Corporation has introduced a commercial high-performance computing service located at Tseung Kwan O InnoPark. Utilizing NVIDIA’s data center server system, this facility accelerates tasks such as AI model training. By early 2026, the center aims to offer computing speeds nearing 3,000 petaflops, capable of processing nearly 10 billion images per hour.
Geopolitical Challenges: Impact of Export Restrictions
Despite its advancements, Hong Kong’s AI ambitions face challenges stemming from evolving international relations. The enactment of the National Security Law in 2020 has led Western nations, particularly the United States, to view Hong Kong less as an independent entity and more as an extension of mainland China. As a result, the U.S. has applied export restrictions to Hong Kong similar to those imposed on China, limiting access to critical high-end technologies.
In October 2022, the U.S. imposed controls on advanced GPUs and semiconductor manufacturing technologies, which are essential for AI research and development. These restrictions were further tightened in January 2025, broadening the scope of licensing requirements to prevent advanced computing chips from reaching Hong Kong.
These measures directly impact Hong Kong’s ability to procure GPUs critical for training and deploying advanced AI models. Research institutions and enterprises face higher costs and delays in accessing cutting-edge hardware, while the city’s reputation as a hub for AI innovation may suffer.
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Navigating Challenges: Strategies for Resilience
Hong Kong’s AI sector is actively seeking ways to overcome these barriers. Key strategies include:
Fostering Indigenous Innovation: Investments in local technologies can reduce reliance on restricted hardware imports and strengthen Hong Kong’s technological independence. SenseTime, a leading AI company specializing in computer vision and deep learning, originated from the Hong Kong Science Park. The company has developed various AI applications, including facial recognition technology used in security and fintech sectors.
Regional Collaboration with Mainland China: Hong Kong can leverage its integration into the Greater Bay Area to access shared resources and expertise, mitigating the impact of Western restrictions.
XtalPi's AI-Driven Drug Discovery: XtalPi, an AI-driven drug discovery firm based in the Greater Bay Area, exemplifies successful regional collaboration. By leveraging resources and expertise across Hong Kong and Shenzhen, XtalPi has significantly reduced drug discovery times from four years to two, showcasing the benefits of integration within the Greater Bay Area.
Hong Kong-Shenzhen Innovation and Technology Park: Located in the Lok Ma Chau Loop, this joint venture between Hong Kong and Shenzhen aims to create a hub for innovation and technology. The park focuses on areas such as AI, robotics, and biomedical technologies, facilitating cross-border collaboration and resource sharing.
Diversifying Partnerships: Exploring partnerships with countries outside the scope of U.S. export controls offers an alternative avenue for sourcing hardware and fostering collaboration.
Pony.ai's Global Expansion: Pony.ai, an autonomous driving technology company, is expanding its operations beyond mainland China into Hong Kong, South Korea, Luxembourg, and the Middle East. By establishing partnerships in these regions, Pony.ai diversifies its technological collaborations and reduces reliance on any single market.
Artificial Intelligence Association of Hong Kong: The Artificial Intelligence Association of Hong Kong (AIHK), established in November 2024, is dedicated to fostering a vibrant AI ecosystem by aligning with international standards and introducing new AI applications across key industries in Hong Kong. However, upon visiting their website on 25th January 2025, it becomes evident that the association may still be in its developmental phase. Many links in the footer are inaccessible. Upon further inspection of the embedded links, it was noted that the website redirects users to a different domain name, aiassociationhk.org, while the official website domain is aihongkong.org. It is surprising to find such inconsistencies on the official website of an AI association in Hong Kong.
Enhancing Public Awareness and Talent Development: The government and institutions are focusing on nurturing local talent and increasing public understanding of AI’s transformative potential.
AI-Powered English Learning System by HKUST: The Hong Kong University of Science and Technology (HKUST) has secured over HK$30 million in funding from the Quality Education Fund to develop an advanced AI-powered English assessment and learning system. This three-year initiative aims to offer free access to all secondary school students in Hong Kong, thereby integrating AI into education and increasing public understanding of its transformative potential.
Professional Development Programs by the Education Bureau: The Education Bureau (EDB) has been providing professional development programs related to AI, covering diversified topics such as AI development and its applications since October 2024. These programs aim to equip educators with the necessary knowledge and skills to teach AI concepts, thereby fostering a new generation of AI talent.
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This same image appeared after a considerable wait when we clicked on the pages for 'About,' 'Memberships,' 'Events,' 'Data Privacy Policy,' 'Terms and Conditions,' and 'Code of Conduct Policy' in the official website of AIHK at approximately 9:45 PM HKT on 25 January 2025.
This is the footer design of the official AIHK website with the domain name aihongkong.org. All six links in the footer redirect to aiassociationhk.org. It appears that no proper redirection for broken links has been configured by the website administrator, rendering all the subpages under aiassociationhk.org inaccessible.
Balancing Innovation and Geopolitical Realities
Hong Kong’s dual role as a global financial center and a gateway to mainland China creates both opportunities and challenges in its AI journey. While its infrastructure investments and government policies provide a strong foundation for growth, external factors such as export restrictions demand adaptive strategies. The city’s ability to navigate this complex landscape will determine its success in becoming a global leader in AI.
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Source: Hong Kong Government News, GovHK, South China Morning Post, The Diplomat, BIS, Wikipedia, HSITP, SCMP, Reuters, PR Newswire, HKUST
