The successful tender of the right to build a supercomputing hub in the Northern Metropolis offers strong encouragement to more enterprises to follow in the footsteps of the mainland company that won the award, according to local industry representatives.

The lawmaker representing technology and innovation also said the project would, once the hub came online, offer the artificial intelligence industry a strong shot in the arm, thanks to the expected 36-fold surge in the city's computing power.

Their comments came after a day after the government announced that it had awarded the tender for a data facility site at Sandy Ridge to the sole bidder, Hong Kong Range Intelligent Computing Technology, in return for payment of a HK$581 million land premium and HK$23.8 billion worth of investments.

Speaking on an RTHK radio show on Tuesday, Advisory Committee on the Northern Metropolis member Edward Lau said the successful tender marked the first major investment by a private industrial firm in the drive to develop an area linking Hong Kong and Shenzhen.

"I think it will give other industrial companies a shot in the arm and let them know that the [government's] industry-oriented model can be successful," he said.

"I believe [the tender] can also encourage more industries and enterprises to plan similar projects and invest in the Northern Metropolis."

The firm's holding company, Hebei-based Range Intelligent Computing Technology Group, is one of the top enterprises in the country that specialises in developing and operating high-end data facilities.

Under the terms of the tender award, the company must complete its investments over the first three years and begin operations within 42 months,

The project is envisaged to raise the city's computing power to 180,000 petaflops by 2032, a level that is 36 times the current capacity.

Technology lawmaker Duncan Chiu said on the same radio show that the long-anticipated move would offer a great boost to an artificial intelligence industry that was highly dependant on data-processing capacity.

"In fact, if we talk about companies that handle large-scale computing power – for example firms that are dealing with meteorological data or data for social-media platforms – they consume some 20,000 to 30,000 petaflops on average," he said.

"So if we want to have more such large-scale computing models to move to Hong Kong, we must have the computing power first. It'll provide one key reason for AI teams to settle in Hong Kong."

Chiu also pointed to the scarcity of such supercomputing hubs, which are different from the conventional data centres and have more sophisticated and tailored construction layout.

"There are actually not many supercomputing centres, even in China or the United States. Some might be used by tech firms such as Google or the mainland's [original version of] TikTok," he said.

In a statement, the Hong Kong Productivity Council said the site would help attract tech firms and talent and facilitate the city in ushering in its own "Silicon Valley moment".

Separately, Ryan Ip, vice president of think tank Our Hong Kong Foundation said the adoption of a "two-envelope" approach to the tender exercise – under which a weighting of 70 percent was given to the non-premium proposal and 30 percent to the premium proposal – marked "a milestone".

"This approach is more effective as it ensures that the project closely aligns with the government's industrial policy orientation, allowing strategic and high-quality investments to stand out," he said, adding that such an approach should be used in more future tenders.

CLP Power said in a statement that it would fully co-operate with the government and support the SAR in transforming the area into a regional data centre hub.

It added that it would keep in close communication with the company to understand the planned project's electricity needs, while offering tailored solutions, adding that it's confident of meeting the Northern Metropolis' higher power demands.

Located to the east of Lo Wu, the Sandy Ridge Data Facility Cluster site covers an area of over 110,000 square metres.



Edited by Thomas McAlinden