Hong Kong’s AI push needs a broader vision and more realistic goals

Hong Kong cannot be faulted for not working hard enough to catch up in the global artificial intelligence (AI) race. Government funding is flowing generously towards projects focused on AI adoption. In recent years, the government has pumped billions into building the necessary infrastructure, including HK$2.84 billion (US$364 million) for a semiconductor centre, HK$3 billion for an AI subsidy scheme and another HK$1 billion allocated for an advanced AI R&D institute. In March, the government granted 11 hectares of land – pretty sizeable by Hong Kong standards – to a Hebei-based computing technology company to build a massive data centre at Sandy Ridge, which would increase Hong Kong’s computing power by 36 times the current level by 2032. This ambitious project intends to provide the city with the computing power needed to take its AI development to the next level. Yet, the differential between mainland Chinese and Hong Kong electricity charges has caused lingering doubts about its commercial viability. Hong Kong is spending an unprecedented amount of tax dollars to jump-start its AI development, which will transform how we work, live and even think. It is as though all the talk about building an “I and T” (innovation and technology) ecosystem has become obsolete. It’s AI and nothing else. This is not surprising if you look at what is happening in advanced economies. In the United States, tech behemoths are outspending one another to recruit top AI talent and build the most powerful models. A phenomenal amount of money is flowing into AI investment. In May, Goldman Sachs raised its estimate of money flowing into AI in the US to US$800 billion by the end of the year. The Hong Kong government is spending a pittance compared with the trillions that US investors and tech giants are pouring into the AI boom. China spends much less than the US but is determined not to be left behind. At the Summer Davos meeting in Dalian, Liaoning province, Premier Li Qiang drew attention to the explosive growth of China’s AI sector. He pointed out that multiple large language models had achieved new performance breakthroughs, with daily token consumption surpassing 100 trillion by the end of May. Moreover, embodied AI had begun moving into commercial deployment. Meanwhile, Hong Kong’s professional service sector is using more AI tools to improve performance. Entry-level jobs are being axed, similar to what is happening in the US. In February, the Joint Institution Jobs Information System of the city’s eight publicly funded universities disclosed that vacancies for fresh graduates dropped by 55 per cent in 2025, compared with the previous year. AI deployment is reshaping Hong Kong’s labour market, jeopardising job opportunities for young people equipped with old skills. When more technology-based industries are established in the Northern Metropolis, there will be more demand for computing power, which should put what is likely to be Hong Kong’s largest data centre at Sandy Ridge to good use. Yet industries accustomed to much lower electricity charges in mainland China would have difficulty adjusting to the much higher level of electricity tariffs here. Hong Kong will have to strengthen its competitive advantages in other areas to attract innovative enterprises. As Chief Executive John Lee Ka-chiu promised in last year’s policy address, the city has rolled out programmes to promote AI literacy. The government aims to reach 50,000 residents in two years. The Curriculum Development Council has also published a blueprint for digital development in primary and secondary schools. Education is far more likely to make an impact than any public relations exercise. Of course, much depends on teachers’ preparedness and programme quality. Merely throwing money at the problem will not produce the desired outcomes. In 2024, the government merged two offices to create the Digital Policy Office. While the move was long overdue, the office seems oblivious to debates raging in the West over the ethical, societal, legal and security implications of AI advancement. In a recently released white paper on more just and equitable global governance, Beijing made a bold attempt to address AI governance issues and called for international cooperation. Singapore has set up a national AI council chaired by its prime minister. Its latest strategic update reveals a focus on enabling AI adoption that serves the public. Hong Kong’s AI ambitions will not be fulfilled by infrastructure and subsidies alone. While the government is working to expand computing capacity, encourage adoption and attract investment, the city lacks a strategy that emphasises workforce preparedness, education, skills development, data governance, security risks, ethical standards and the social consequences of AI, not just economic competitiveness. Without a coherent framework linking these elements, individual initiatives risk becoming disconnected projects rather than components of a sustainable AI ecosystem. Hong Kong must be realistic about what it aims to achieve with its finite resources, a relatively small AI talent pool and an economy dominated by services rather than technology-based manufacturing. The city is unlikely to outspend Silicon Valley or outscale Shenzhen. Nor does it need to. Its comparative advantage lies in acting as a bridge between the rest of China and the world, leveraging its international connectivity, legal system, financial markets and research capabilities. Instead of attempting to build a complete AI ecosystem from scratch, Hong Kong should focus on integrating with the mainland’s rapidly advancing AI landscape while developing its own complementary strengths. Success will depend less on how much money is spent and more on how intelligently the city positions itself within the broader Chinese and global economy.

Hong Kong’s AI push needs a broader vision and more realistic goals

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The city is unlikely to outspend Silicon Valley or outscale Shenzhen. But it doesn’t need to

The city is unlikely to outspend Silicon Valley or outscale Shenzhen. But it doesn’t need to