February 28, 2025
By Anjali Kochhar
Hong Kong is increasingly investing in artificial intelligence (AI) and digital assets, unveiling a HK$1 billion fund for AI research and introducing new crypto regulations. This has led to a surge of 3.2% in the Hang Seng Index.
Financial Secretary Paul Chan, in his 2025-26 Budget Speech, announced the establishment of an Artificial Intelligence Research and Development Institute. This initiative aims to bolster AI research and industrial applications, with oversight from the Digital Policy Office to ensure alignment with Hong Kong’s broader innovation strategy.
Not just this, Hong Kong is strengthening its AI infrastructure. The Cyberport AI Supercomputing Centre is all set to reach 3,000 petaFLOPS of computing power by 2025, positioning the city as a key AI hub in Asia.
At the same time, the Hong Kong Microelectronics R&D Institute plans to launch pilot semiconductor production lines at the Yuen Long Microelectronics Centre in 2026, furthering the city’s ambitions in the tech sector.
It should be noted that these investments come amid economic uncertainty. The government plans to cut 10,000 civil service jobs by 2027 and freeze public sector salaries. Officials aim to reduce public expenditure by 7% by 2028 to address the growing fiscal deficit.
Besides AI, Hong Kong is advancing its digital asset regulatory framework. The government is expected to release an updated policy integrating digital assets with traditional finance while ensuring security and flexibility.
A consultation on licensing for over-the-counter virtual asset trading and custody services is expected later this year. Additionally, a bill regulating fiat-backed stablecoin issuers has been introduced, with the Hong Kong Monetary Authority preparing to review license applications once the framework is in place.
The budget’s strong emphasis on technology and financial innovation lifted Hong Kong’s markets.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
