Microsoft sees booming enterprise AI demand in Hong Kong amid US-China tech war that threatens cloud services

Microsoft is seeing booming demand for its artificial intelligence (AI) products in Hong Kong, where the US tech giant is the largest player in the space owing to the conspicuous absence of OpenAI’s ChatGPT and Google’s Bard.

Microsoft said it has seen AI usage on its Azure cloud platform jump sevenfold in Hong Kong over the past six months, as it seeks to leverage its use of OpenAI’s Generative Pre-trained Transformer (GPT) models to improve education, healthcare and fintech in the city.

Likening AI to momentous technological shifts in the past such as the printing press and the steam engine, Microsoft Asia president Ahmed Mazhari said the industry is just at the start of a marathon, and Hong Kong has some unique advantages.

“We believe Hong Kong has that ability to pivot and innovate. Hong Kong is also one of the largest financial centres in the world,” Mazhari said. “Hong Kong is now trying to pivot to using technology to become even more relevant in the financial ecosystem.”

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While Microsoft’s Bing Chat is accessible in the city without a virtual private network – differentiating it from its biggest rivals – it has largely focused on carving out an edge in enterprise offerings. The software giant has touted its ability to keep corporate information sandboxed, saying its large language models (LLMs) will never be trained on customer data.

“[When] you use the enterprise chat, we will not store your questions,” said Cally Chan, general manager of the company’s Hong Kong and Macau operations. “The data you use to train it will only happen in your own subscription. We will never use your own data to train our model.”

Fintech, especially in the area of regulatory compliance technology, is a significant use case in Hong Kong, Chan added. Out of 3,900 start-ups using Microsoft’s AI products in the city, about 800 are fintech companies, she said.

“Hong Kong tends to be a financial services centre, and therefore you might see more partners who are focused on financial services,” Mazhari explained. “We hope to work and enable customers who want to innovate.”

The Hong Kong arm of Forms Syntron, a Shenzhen-based financial services and consultancy firm, is one local company that has already adopted Microsoft’s generative AI tech for tasks such as faster searches of regulatory documents. Regulatory technology, or regtech, is a specific area of focus for Microsoft.

With many clients already using Microsoft’s Azure cloud service, it made sense for Forms to go with the US tech giant for AI, according to Alex Chan, CEO of Forms Hong Kong. The company also sees getting into AI early as a competitive edge.

“This is a very, very new technology domain, which is also game-changing, as well. Globally, not to mention Hong Kong locally, there is not much experienced expertise or resources available in the market,” Chan said. “I think we have gained very good leeway to build up expertise and experience.”

Shanghai-based air ticketing platform Trip.com has also been using Microsoft’s AI this year to help customers with travel planning and bookings.

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When asked if any of those incidents could jeopardise the company’s position in the Hong Kong market, Microsoft’s Chan demurred, pointing to continued growth for AI products in the city.

“So far the market momentum is very good,” she said. “If you ask me are there any constraints, or is there any reduced demand, indeed no. We are seeing increasing demand.”

Microsoft has so far had no issues with making Bing Chat freely accessible in the city. Google and OpenAI, which counts Microsoft as its biggest backer, have made no comments to date on why their chatbots remain officially unavailable in Hong Kong.