Singapore Inc is banking on its superior access to advanced AI models to stem the flow of finance professionals relocating to Hong Kong, which is rolling out sweeping tax cuts. The competition between Asia's two leading financial hubs has intensified, with both cities vying for top-tier investment managers and global financial institutions.

Kher Sheng Lee, co-head of Asia-Pacific at the Alternative Investment Management Association (Aima), emphasized that businesses seek certainty in taxation and access to cutting-edge AI tools. Aima recently warned that several hedge fund and private equity members in Singapore were contemplating moving senior staff to Hong Kong to capitalize on incoming tax reductions.

Meanwhile, Hong Kong's resurgence, driven by a surge in Chinese listings, faces challenges as major banks like Goldman Sachs and JPMorgan restrict access to AI models such as Claude due to U.S. export controls. Quantitative hedge funds, heavily reliant on frontier AI models, are particularly affected.

In contrast, Singapore's strong ties with both the U.S. and China ensure broad access to the latest AI technologies, including models from Chinese firms like Moonshot and Deep Seek. Justin Tan of LEK Consulting noted an increasing trend of investment managers considering relocations to Singapore for better AI access. Citadel recently mandated its Hong Kong-based quantitative strategies team to relocate or resign, with data security concerns cited as a factor.

To counter Hong Kong's tax incentives, Singapore's Monetary Authority (MAS) is reviewing measures to boost competitiveness, including potential tax cuts and streamlined foreign recruitment processes.