Chinese AI Boom Sends Hong Kong Data Center Prices Soaring
(Bloomberg) -- Chinese tech firms, from Bytedance Ltd. to artificial intelligence startups, are driving demand for Hong Kong’s data centers, helping push lease prices up by nearly double this year.
The AI boom, fueled in part by the success of DeepSeek, has prompted more Chinese firms to use Hong Kong as a springboard to test models and expand overseas. Deals for digital infrastructure accelerated in the last quarter, driving up prices for data center capacity on a per-kilowatt basis, according to Structure Research, a data center consultancy.
Chinese hyperscalers, including Alibaba Group Holding Ltd. and Tencent Holdings Ltd., are increasing their capacity in the city, said Jason Zhou, senior analyst with the research firm. Some Chinese independent boutique AI firms are also entering the market to expand their overseas presence, he added.
“I would say 90% Chinese and 10% Western” for data center leasing deals in the past few months in Hong Kong, Zhou said. “It’s almost entirely a Chinese market now.”
AI usage has drastically increased tech giants’ demand for capacity, as opposed to the lower requirements needed for cloud services in the past, he said. “Chinese players are very open to deploy inference AI in Hong Kong, so they need to buy a lot of capacity.”
As a result, wholesale pricing bands offered to hyperscalers have increased by 90% from the beginning of the year, one of the largest rises in Asia. Wholesale prices are now as much as $180 per kilowatt, still far behind the $300-$490 range in Singapore, where supply is constrained, according to Structure Research.
For these fast-growing tech firms, Hong Kong offers advantages over the mainland. Its free flow of data and direct access to the international market stands in contrast to China’s tightly controlled internet environment.
“If you want to train some of your AIs and compete in an international space, Hong Kong is a nice cocoon to test some of your AIs and see how you fare,” said Zhou.
Major data center operators including SUNeVision Holdings Ltd., DayOne Data Centers Ltd. and Equinix Inc. are among those benefiting from the AI boom and raising billions of dollars in debt to fund their expansion plans.
Still, financial firms remain a key source of demand for digital infrastructure in the business hub.
“It’s important not to ignore the size of the customer base here in terms of traditional finance — it’s big,” said Dauwood Malik, managing partner in Hong Kong at law firm Clifford Chance, who has worked on data center deals. The rise of algorithm trading also results in higher demand for capacity, he added.
In a recently opened HK$1 billion ($127 million) facility by Equinix, financial services, together with tech companies, make up most of the demand.
For finance customers who care about latency, Hong Kong’s location near major markets like Singapore and Tokyo makes it hard to miss, said Simon Lockington, senior director at Equinix.
“Just from a geolocation point of view, Hong Kong really has some advantages, plus the momentum and weight of being a financial hub is too big to ignore,” Lockington said.
©2026 Bloomberg L.P.
