How Hong Kong could gain from the US-China AI divide

DeepSeek’s planned price hike could boost the city’s strategic value.

Hong Kong could become more valuable for artificial intelligence (AI) data and computing infrastructure as China and the US develop increasingly separate AI regimes, according to an MIB Securities report.

The outlook comes as China’s AI price war shows signs of easing, with Chinese AI developer DeepSeek preparing to raise prices after helping drive down the cost of AI services over the past two years.

The developer said on 6 August that it would make a significant increase in overall application programming interface (API) prices in the near future, although the magnitude and timing remain unspecified. 

"While DeepSeek's actual hike magnitude and date remain unspecified, if it is smaller than expected, the capacity shortage story weakens, and the price war could resume," MIB said.

Z.ai’s response will also be important. If it follows in raising prices instead of maintaining lower rates to gain market share, the sector’s pricing floor could move higher.

“The two-year deflationary trend in Chinese API pricing has at a minimum paused,” the brokerage added.

The pricing changes are unfolding amid a broader contest between China and the US over AI models, computing resources, and access to advanced technology, which MIB expects will increase Hong Kong’s value as an intermediary jurisdiction.

However, recent industry findings showed that whilst 85% of businesses in the city were expanding their use of AI, only a small share of projects had reached full production.

Key factors that challenge deployment included weak data foundations, talent shortages, and governance challenges.

“If you can't trust the data, it is hard to trust what you're going to get back from AI systems,” said Kunal Taneja of Databricks in a separate video interview with Hong Kong Business, adding that legacy infrastructure and siloed systems continue to weaken adoption.

Meanwhile, Chinese AI models are gaining a larger share of global usage. Chinese-origin models account for more than 46% of routed tokens on OpenRouter, compared with around 36% for US-origin models.

However, its open-source models account for only about 1% of enterprise API spending, indicating that their growing usage has yet to translate into a comparable share of corporate spending, the MIB report showed.