Hong Kong’s 2026 AI Initiatives: Adoption, Funding and Risk Governance

Hong Kong’s 2026 Policy Address and 2026-27 Budget outline new measures to accelerate AI adoption, support business innovation and help small and medium-sized enterprises (SMEs) integrate AI into their operations.

Alongside these initiatives, the government is addressing AI-related risks, including data privacy, deepfakes and legal liability. These developments highlight the importance of balancing technological advancement with responsible AI governance for businesses operating in Hong Kong.

Policy Address 2026 on AI governance

The 2026 Policy Address, delivered by Chief Executive John Lee on September 16, 2026, sets out measures on both the application and the risk management of AI. Central to these is the creation of a Commissioner for AI, a new post under the Digital Policy Office that will assist bureaus with AI-related work. The government will also implement a risk-governance strategy covering seven aspects, ranging from combating the use of AI in criminal activities to examining the impact of AI on employment.

On the legal front, the Law Reform Commission’s Cybercrime Sub-committee is reviewing existing laws on deepfakes, and the government will consider legislation in line with its recommendations. A working group spearheaded by the Department of Justice will examine legal liability arising from accidents caused by AI products. The government will also introduce guidelines on AI Agent management and set up a new Task Group on Frontier Technology covering AI and other frontier technologies.

AI adoption support for SMEs

The Policy Address also includes measures to support AI adoption by SMEs. The Digital Transformation Support Pilot Programme will provide matching subsidies to help more SMEs adopt AI and cybersecurity solutions, while the BUD Fund will offer targeted support for AI-related projects.

The Hong Kong Productivity Council will add AI-assisted advisory services for SMEs to its Digital DIY Portal. In addition, Upskill Hong Kong will launch an 18-month AI upskilling campaign in the first half of 2027, which is expected to benefit around 40,000 employees.

Budget 2026-27 funding for AI

The 2026–27 Budget, delivered by Financial Secretary Paul Chan on February 25, 2026, includes a dedicated “Artificial Intelligence +” section. The Financial Secretary has established and chairs the Committee on AI+ and Industry Development Strategy, and the HK$3 billion AI Subsidy Scheme has approved around 30 R&D applications.

To support enterprises, the government will inject HK$200 million into the BUD Fund. The Employees Retraining Board will also be upgraded as Upskill Hong Kong, offering skills-based courses that include AI application.

The funding ceiling of Easy BUD will be raised to HK$150,000 per application. The government is also consulting the trade on tax deductions for purchasing IP or the rights to use IP, with an amendment bill planned for this year.

PCPD recommendations for AI users

In its compliance check findings published on May 19, 2026, the Office of the Privacy Commissioner for Personal Data (PCPD) recommended that all organizations developing or using AI establish an AI strategy and governance structure, alongside adequate training for relevant staff. Organizations should also establish internal policies on employees’ use of AI, including generative AI and AI agents, and conduct risk assessments, including privacy impact assessments, with a higher level of human oversight for higher-risk AI systems.

The PCPD further recommends preparing an AI incident response plan, conducting regular audits of AI systems to ensure system and data security, and communicating with stakeholders to enhance transparency in the use of AI.

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Key takeaways for businesses

Hong Kong’s 2026 Policy Address and 2026-27 Budget highlight the government’s commitment to accelerating AI adoption while strengthening risk governance. From new oversight measures to funding and training initiatives for SMEs, these developments provide businesses with opportunities to explore AI adoption while preparing for emerging regulatory and operational challenges.

As AI becomes increasingly integrated into business operations, companies should stay informed of policy developments and establish appropriate governance measures to ensure responsible and secure use of the technology.

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