Hong Kong’s sovereign wealth fund has signed the first strategic cooperation agreement with a locally incubated artificial intelligence unicorn, underscoring the special administrative region’s aspirations for developing frontier technologies and enriching its innovation ecosystem.

Hong Kong Investment Corporation Chief Executive Officer Clara Chan Ka-chai confirmed the deal with SmartMore Corporation Founder and Chairman Jia Jiaya on Wednesday, witnessed by Financial Secretary Paul Chan Mo-po.

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“The work of the HKIC is to use investment to drive the development of the innovation and technology ecosystem,” Chief Executive John Lee Ka-chiu said in a pre-recorded speech.

Under the strategic cooperation agreement, SmartMore will establish the city’s first artificial intelligence research institute, cultivate young talent in AI, prioritize Hong Kong as the unicorn’s first listing location, and invest resources to improve computing power in Hong Kong

“The HKIC has decided investment themes and targeted some high-quality local, Chinese mainland and overseas companies in related fields for in-depth discussion. More good news will be announced in the future.”

“The cooperation covers the upstream and downstream industrial chains of artificial intelligence, talent training, and improving Hong Kong’s computing power level,” the chief executive added.

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“It will promote the wider application of large-scale model innovation in the Guangdong-Hong Kong-Macao Greater Bay Area, and will also establish Hong Kong’s first artificial intelligence research institute, which is of great significance.”

Under the strategic cooperation agreement, SmartMore will establish the city’s first artificial intelligence research institute, cultivate young talent in AI, prioritize Hong Kong as the unicorn’s first listing location, and invest resources to improve computing power in Hong Kong.

“HKIC has a dual mission,” Chan said. “On the one hand, we strive for reasonable financial returns through investment. More importantly, we use the power of capital in guiding the ecosystem and leveraging other resources to help build and activate Hong Kong’s key industrial ecosystem.”

By combining the Hong Kong Growth Portfolio, Greater Bay Area Investment Fund, Strategic Tech Fund, and Co-Investment Fund, the SAR announced the establishment of the HKIC in 2022 to further optimize the use of financial reserves for promoting the development of industries and the wider economy.

The HKIC CEO said the sovereign wealth fund will focus on three investment themes  —hardware technologies, life sciences, and new energy technologies.

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Hardware technologies include AI, data science, and semiconductors, while the life sciences category encompasses the fields of medical diagnosis, instruments, and drugs in both Western and Chinese medicine.

By cooperating with the HKIC, we can effectively integrate resources, create momentum for technological innovation, and upgrade Hong Kong’s new foundation in manufacturing and constructing Industry 4.0 development. 

Jia Jiaya, SmartMore Corporation Founder and Chairman

At the ceremony luncheon in the Ritz Carlton Hotel, finance chief Chan said: “Hong Kong’s overall research and development expenditure increased from HK$21.3 billion ($2.73 billion) in 2017 to HK$30.1 billion in 2022, an increase of more than 40 percent, and the R&D ratio to gross domestic product also increased from 0.8 percent to 1.07 percent.”

Chan added that the number of scientific research personnel working in the city increased from approximately 32,000 in 2017 to nearly 40,000 in 2022. There were 4,250 start-ups in Hong Kong last year, an increase of 7 percent year on year. Hong Kong Science Park and Cyberport incubated 20 unicorn companies, with a total market value in the 10s of billions of US dollars.

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Chan encouraged more startups like SmartMore to consider Hong Kong as a listing venue and inject more vitality and impetus into the Hong Kong securities market.

“SmartMore will use Hong Kong as its base focusing on the industrial transformation opportunities brought by Industry 4.0,” Jia said. “By cooperating with the HKIC, we can effectively integrate resources, create momentum for technological innovation, and upgrade Hong Kong’s new foundation in manufacturing and constructing Industry 4.0 development.”

Established in Dec 2019, SmartMore is a Hong Kong unicorn company specializing in the new generation of flexible intelligent industrial products that are seamlessly connected with advanced production lines in optics, mechanics, and automation.

The firm currently serves nearly 300 industry leading companies around the world with R&D and business centers in Hong Kong, Shenzhen, Shanghai, Beijing, Singapore, and Tokyo, and has established representative offices and partner networks in Southeast Asia and Europe.