Amid battle for AI edge, Hong Kong presses HSBC over Singapore hub decision: sources

As Hong Kong and Singapore vie for supremacy in sectors like foreign exchange trading and wealth management, the competition has expanded to artificial intelligence, with both cities striving to entice investment from HSBC and other major firms, according to industry insiders. The matter gained prominence after the Hong Kong Monetary Authority (HKMA) inquired about HSBC's decision to establish an AI center in Singapore, despite Hong Kong being the bank's largest market, according to an industry source.

HSBC announced plans to set up an AI center in Singapore by year-end and hire 100 specialists in the field. The move followed the bank's agreement to sell its Singapore life and health insurance business to Allianz for S$2.7 billion. The HKMA has been in talks with HSBC since the announcement. HSBC's spokesman did not provide comment.

The issue took on added significance after Hong Kong unveiled its five-year plan, which prioritized AI investment and development. Tom Chan, an honorary president of the Institute of Securities Dealers, said the HKMA's action sent a clear message to major banks and corporations that Hong Kong should be prioritized in AI investment decisions.

Kenny Ng, a strategist at Everbright Securities International, noted that Hong Kong would need significant corporate investment to become an AI hub, beyond government initiatives. Stephen Law, president of the Hong Kong Institute of Certified Public Accountants, emphasized that Hong Kong should actively seek AI investments, research teams, and high-value technology functions from banks to compete with Singapore.

Law stated that Hong Kong was already making progress in this area. HSBC's decision not to reduce its Hong Kong commitment, as confirmed by HSBC CEO Georges Elhedery, who stated that the bank has a strong AI team in the city and plans to expand it. Tommy Ong, managing director of T.O. & Associates Consultancy, suggested that Hong Kong should seek appropriate levels of AI investment from institutions that generate most of their revenue in the city.