Chinese AI boom sends Hong Kong data centre prices soaring
Chinese firms are using Hong Kong as a springboard to test models and expand overseas.
HONG KONG – Chinese technology companies, including AI start-ups like Bytedance, are significantly boosting demand for the city's data centres, driving lease prices nearly double in 2026. The surge in demand, fueled by the success of local AI models such as DeepSeek, has led more Chinese firms to utilize Hong Kong as a testing ground for models and an entry point for overseas expansion.
Structure Research, a data centre consultancy, reports that deals for digital infrastructure have accelerated in the past quarter, leading to a sharp rise in prices for data centre capacity on a per-kilowatt basis. Chinese hyperscalers, such as Alibaba Group Holding and Tencent Holdings, are expanding their presence in the city, while some independent AI firms are also joining the market to strengthen their global reach.
Analyst Jason Zhou notes that 90% of data centre leasing deals in Hong Kong in recent months are with Chinese entities, with the remainder being from Western firms. The increased demand for capacity is primarily driven by AI usage, as opposed to lower requirements for cloud services. Chinese players are eager to deploy inference AI in Hong Kong, necessitating the acquisition of substantial data centre capacity.
As a result, wholesale pricing bands offered to hyperscalers have surged by 90% since the beginning of the year, reaching up to $180 per kilowatt, significantly lower than the $300-$490 range in Singapore due to supply constraints. The city's advantages over the mainland, such as its free data flow and direct access to the international market, make it an attractive choice for tech firms seeking to train AI models and compete globally.
Major data centre operators, including SUNeVision Holdings, DayOne Data Centers, and Equinix, are taking advantage of the AI boom, raising billions of dollars in debt to fuel their expansion plans. Financial firms remain a significant source of demand for digital infrastructure in the bustling business hub. Dauwood Malik, managing partner at Clifford Chance, highlights the importance of the traditional finance sector and the growing role of algorithm trading in driving demand for capacity.
Equinix's Simon Lockington emphasizes the city's strategic location near major markets like Singapore and Tokyo, offering advantages in terms of geolocation and its status as a financial hub.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written; read the original for the full account.
