(Yicai) April 30 -- The most noticeable shift in Hong Kong's artificial intelligence ecosystem over the past two years has been the move from simply paying attention and talking about the technology to actually deploying it at scale, according to the vice president of international business at Alibaba Cloud Intelligence Group.

Corporate decision-making around AI is undergoing a fundamental change, Ethan Yuan, who is also regional general manager for Hong Kong and Macao at Alibaba Cloud Intelligence, said in a recent interview with Yicai. Before large language models took off in 2023, companies were primarily driven by digital transformation goals, but the focus has shifted to AI investment aimed at generating new revenue, he pointed out.

Once there is a positive return on investment, there will theoretically be no ceiling on AI spending, Yuan said, adding that enterprise AI outlays will accelerate sharply over the next five to ten years.

The trend mirrors the broader growth of the global cloud computing market, where the Infrastructure-as-a-Service market rose 24 percent last year, adding USD45 billion in new revenue, with AI-related workloads as the primary growth driver, according to the latest report by US research and advisory firm Gartner. Alibaba Cloud's global market share grew to 7.7 percent, while that in the Asia-Pacific topped 22.5 percent, keeping it as the top regional provider.

Hong Kong's role in the AI ecosystem is becoming increasingly well-defined, serving as a critical node linking the Chinese mainland's innovation capabilities with global use cases, Yuan noted. The city's highly international business environment, combined with its close ties to the industrial supply chains in the Guangdong-Hong Kong-Macao Greater Bay Area, makes it a natural base for mainland firms expanding offshore and building global digital infrastructure, as well as for foreign companies seeking access to the Chinese market, he pointed out.

Alibaba Cloud's client mix in the region reflects this trend, with local companies, mainland firms going global, and international enterprises entering China, Yuan said.

Cross-border operations have become the fastest-growing segment, Yuan said. "If you look purely at growth in global deployment, mainland companies expanding overseas are clearly leading." 

International clients are also increasingly open to Chinese technology platforms, he said, noting that “many didn't use to choose us as their first option, but now their growth rate with us is equally impressive. They are making greater use of tech and platforms from Chinese companies.”

While the cloud computing market remains dominated by global players, including Amazon Web Services and Microsoft Azure, competition is intensifying in regional markets. Alibaba Cloud's edge lies in the combination of its cross-border service capabilities and its full-stack tech offering, enabling firms to deploy in compliance with local regulations across different markets, he noted.

"Companies choose the area closest to customers, especially in their local data centers, for cloud computing and AI deployment, which is fully compliant," he said.

Regarding the impact on employment, AI is more likely to restructure capabilities than replace workers, Yuan noted, citing an internal Alibaba example where seven engineers, using AI-assisted programming tools, spent five days each to build an application development platform designed for non-technical users.

The project transformed engineers who had previously been siloed in front-end, middleware, and database roles into full-stack developers capable of independently delivering complete products, Yuan pointed out. “What we created is a new scenario, a new engine for revenue growth.”

To accelerate AI adoption, Alibaba Cloud recently launched several initiatives in Hong Kong, including the Million Token Program and a localized AI development platform, Yuan said. The first program offers newly registered businesses and developers up to one million free model application programming interface tokens over three months, lowering the AI use barrier, he noted.

"The underlying intent behind both programs is the same: to reduce the threshold for Hong Kong firms and developers to adopt cloud computing and AI, and to accelerate the development of the local innovation ecosystem," he stressed.

In terms of application areas, AI has expanded well beyond the internet sector to encompass finance, retail, logistics, and public services, Yuan noted, adding that adoption is no longer limited to tech companies, with traditional industries increasingly involved, focused on customer service, knowledge management, and process automation.

AI will become a foundational capability for Hong Kong firms, further driving the city's development in international standards, industrial applications, and regional collaboration, Yuan said. “Hong Kong's future is not simply to become a city that uses AI, but it has the opportunity to become a city that genuinely integrates AI innovation, industrial application, and international connectivity.”

Editor: Martin Kadiev