Hong Kong's 2025-26 Budget strongly emphasizes developing artificial intelligence (AI) as a core industry, reinforcing the city's position as a global AI hub. According to Paul Chan's delivery, the government has introduced a series of strategic initiatives to accelerate AI research, enhance infrastructure, foster international collaboration, and drive smart manufacturing and industrial transformation.
A key highlight is the AI Supercomputing Centre at Cyberport, which has officially commenced operations. By the end of 2025, its computing power will be ramped up to 3,000 petaFLOPS, capable of processing nearly 10 billion images per hour. In parallel, the Hong Kong Microelectronics Research and Development Institute (HKMRDI) is spearheading third-generation semiconductor technology research. Leveraging the Greater Bay Area's industrial chain, the institute will establish two pilot production lines in Yuen Long to begin operations in 2026.
The government has allocated HK$1 billion to establish the Hong Kong AI Research and Development Institute to strengthen AI research and application further. This institute will focus on upstream AI research, midstream technology transformation, and downstream application expansion. The AI Subsidy Scheme, launched in October last year, has already approved five projects led by local universities and research institutions. These projects span key areas such as large language models, new materials, and synthetic biology.
Hong Kong is also intensifying efforts to foster international AI collaboration. The Hong Kong Investment Corporation Limited (HKIC) will host the first International Young Scientist Forum on AI, promoting discussions on AI technology, open-source innovations, and the development of RISC-V chip architecture. The city will also organize the International Conference on Embodied AI Robot, bringing together top technology enterprises, academic institutions, and investors to showcase cutting-edge AI research and its real-world applications.
Smart manufacturing remains a priority, with the New Industrialisation Acceleration Scheme supporting enterprises in establishing smart production facilities in Hong Kong. The first approved project involves a total investment of HK$600 million, with HK$200 million in government funding. The government also plans to launch the Manufacturing+ Pilot Scheme, with HK$100 million earmarked to assist 400 enterprises in upgrading their production lines with advanced AI-driven technologies.
To support AI-driven industries financially, the Hong Kong Stock Exchange (HKEX) is advancing plans for a Technology Enterprises Channel (TECH), facilitating the listing process for specialist technology and biotech firms. Meanwhile, the government is reviewing tax deduction policies related to intellectual property (IP) rights and licensing fees, aiming to accelerate the growth of IP-intensive industries and strengthen Hong Kong's position as an IP trading hub.
AI applications extend beyond manufacturing and finance. In collaboration with Cyberport, the Hong Kong Monetary Authority (HKMA) has introduced a Generative AI Sandbox, fostering AI-driven innovation in the banking sector. The government is also simplifying the licensing process for Low Earth Orbit (LEO) satellites, which have broad applications in smart city development and logistics. Furthermore, the newly established Hong Kong Space Robotics and Energy Centre is developing a multi-functional lunar exploration robot to contribute to China's Chang'e-8 lunar mission.
Hong Kong's AI development strategy marks a significant milestone, integrating research, infrastructure, global cooperation, and commercialization. With robust financial backing and policy support, the city is set to become a leading international hub for AI innovation, driving technological advancements and industrial transformation globally.
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