Speaking at a recent forum, Chief Executive John Lee Ka-chiu said the Hong Kong Special Administrative Region’s high-quality economic development will be guided by its first five-year plan and the upcoming Policy Address, with artificial intelligence as the “central plank”.
He added that the SAR’s advantages under the “one country, two systems” framework, and its commitment to innovation and technology (I&T), place the city in an ideal position to connect the world with opportunities in an AI-powered future.
Indeed, over the past few years, Hong Kong has been steadily building the foundations of its own innovation ecosystem, investing in research, technology, and talent while seeking new drivers of long-term growth. One example made a prominent appearance in June with the launch of HKGAI V3, the newest version of Hong Kong’s homegrown AI model, which suggests that the city is increasingly moving beyond discussions about AI and toward practical implementation. More importantly, it signals a growing recognition that AI could become one of the pillars supporting the city’s next phase of economic development.
The launch of HKGAI V3 comes little more than a year after the debut of HKGAI V1, Hong Kong’s first homegrown large language model. The progress achieved in that relatively short period is noteworthy. Of particular interest is that this development manifests itself at a time when Hong Kong is actively debating its future economic direction. For years, discussions about the city’s competitiveness focused primarily on traditional strengths such as finance, trade, logistics, and professional services. Of course, those sectors remain critical. Yet the global economy is changing rapidly, and future competitiveness will increasingly depend on a city’s ability to participate in technologies such as AI, advanced computing, and digital infrastructure. AI is not simply another industry. Like the internet before it, it is becoming a foundational technology that will influence virtually every sector of the economy.
A couple of years ago, some intense debate arose regarding Hong Kong’s economy when a well-known global voice claimed that Hong Kong was “over”. The fact that Hong Kong ranks higher than ever in most international finance- and innovation-related rankings, while also doubling down on AI and newer industries, proves that Hong Kong is far from “over”. Related to this, a few weeks ago Hong Kong officially surpassed Switzerland as the world’s largest booking center for offshore wealth, according to the Global Wealth Report 2026 released by Boston Consulting Group, thus reinforcing the city’s position as one of the world’s most important financial centers and as one of the most strategic bridges between the Chinese mainland and international capital markets.
There is a very accurate Chinese idiom that can be translated as “dripping water wears away stone”, meaning that perseverance leads to success. That is indeed the case with Hong Kong, and the city’s bet on AI is a clear example.
Successful AI ecosystems require talent, research institutions, financing mechanisms, regulatory clarity, computing resources, and pathways for commercialization. Hong Kong certainly possesses the right ecosystem to be a global AI hub, thanks to its prowess in many areas and being part of China.
History reminds us that innovation often brings more opportunities than losses, if managed wisely. AI is no exception. For Hong Kong, the key lies in preparation, adaptability, and investment in people. By embracing AI as a complement rather than a competitor, Hong Kong can unlock new industries and boost productivity
While cities like Beijing, Shanghai, and Shenzhen have already made headlines for their strong AI ecosystems, the SAR has a unique role to play in China’s endeavor to become a global AI leader by 2030.
The city’s universities provide a strong starting point. Hong Kong consistently punches above its weight academically, with several institutions ranking among the best in Asia and the world. For the first time, all eight of Hong Kong’s publicly funded universities have been ranked among the top 100 institutions in Asia, according to the latest Times Higher Education Asia University Rankings. The Hong Kong University of Science and Technology, which plays a leading role in HKGAI, has become increasingly active in AI research and commercialization initiatives.
However, research is not enough by itself. Innovation generates the greatest economic value when ideas move beyond laboratories and into real-world applications. Here again, Hong Kong possesses important advantages. As one of the world’s leading international financial centers, the city has access to global capital, venture funding, and professional services capable of supporting tech startups. In many ways, Hong Kong’s role in AI may resemble its role in finance: acting as a platform that connects innovation with capital, ideas with markets, and local talent with global opportunities.
The city’s ambitions also align closely with broader national development priorities. Lee recently announced that he would personally lead the formulation of Hong Kong’s first comprehensive five-year development blueprint, which is to be aligned with the national 15th Five-Year Plan (2026-30). Although the details are still being developed, I&T is expected to feature prominently in Hong Kong’s first five-year plan. The emergence of a locally developed AI ecosystem fits naturally within this broader strategic vision and reinforces Hong Kong’s contribution to national development.
The rapidly developing Northern Metropolis offers another important piece of the puzzle. Much has been written about the project as an I&T hub, but its significance goes beyond physical infrastructure. The Northern Metropolis represents an attempt to create a long-term ecosystem where universities, research institutions, startups, investors, and tech companies can collaborate more closely. AI is likely to become one of the defining industries within that ecosystem. The development of homegrown AI capabilities today could therefore help shape the economic landscape of the Northern Metropolis tomorrow.
The Guangdong-Hong Kong-Macao Greater Bay Area strengthens these opportunities further. Increasingly, success in AI will depend on ecosystems rather than individual institutions. Hong Kong contributes international finance, legal expertise, and global connectivity. Shenzhen contributes technological innovation, entrepreneurial dynamism, and advanced manufacturing capabilities. Guangzhou and other partner cities contribute industrial scale and research capacity. Together, these elements create one of the most promising innovation ecosystems anywhere in the world.
To sum up, what makes Hong Kong particularly interesting within this ecosystem is its role as an international connector. AI development is becoming increasingly global. Companies require access to talent, investors, customers, and research partners across multiple jurisdictions. Hong Kong’s international character and institutional strengths allow it to act as a bridge between Chinese innovation and global markets. In many ways, this role resembles the city’s traditional function as a financial gateway, except that the flows being connected increasingly involve data and I&T rather than merely capital.
History reminds us that innovation often brings more opportunities than losses, if managed wisely. AI is no exception. For Hong Kong, the key lies in preparation, adaptability, and investment in people. By embracing AI as a complement rather than a competitor, Hong Kong can unlock new industries and boost productivity.
This is all part of a bigger picture that involves China aiming to become a global AI leader by 2030 — and with the HKSAR’s contribution, that can be readily achieved.
The author is a fintech adviser, a researcher and a former business analyst for a Hong Kong publicly listed company.
The views do not necessarily reflect those of China Daily.
