Secretary for Innovation, Technology and Industry Sun Dong on Thursday said a new Hong Kong AI Research and Development Institute could commence operation as early as next year.

Financial Secretary Paul Chan announced in his budget speech on Wednesday that the government will earmark HK$1 billion for the institute's establishment.

Speaking to reporters, Sun said the institute will not only advance AI research, but also promote its application across various sectors, including innovation and technology, finance, healthcare and government services.

He said the goal is for the institute to take a leadership role in these areas, and generate business opportunities for the local industry.

"The institute will focus on facilitating upstream R&D, midstream and downstream transformation of R&D outcomes and expanding application scenarios. So in terms of the goal and the scale, this AI R&D institute is different from the current InnoHK centre, HKGAI (Hong Kong Generative AI Research and Development Center)," he said.

"The AI institute will be established based on the existing HKGAI centre. In the future, we will gradually integrate the InnoHK centre, HKGAI, into the newly established AI research institute."

Separately, in response to suggestions from lawmakers that Hong Kong should attract the mainland AI company DeepSeek to the city, Sun said all domestic and international AI companies are welcome.

He added that the recently launched large language model HKGAI V1, the SAR's first locally developed generative artificial intelligence, already incorporates DeepSeek-related technology.