A Hong Kong government-backed AI lab is preparing to release a new model based on DeepSeek that will run entirely on Chinese-made chips. The Hong Kong Generative AI Research and Development Centre (HKGAI) plans to unveil its HKGAI-V3 model in the first half of this year, aiming to export its "sovereign AI" capabilities internationally. The system is built on DeepSeek V4 architecture and optimized for both mainstream and domestic hardware, including Huawei Technologies’ Ascend 910C chips, according to director Guo Yike. HKGAI, established in 2023, focuses on developing large language models for Hong Kong. It launched the Cantonese-enabled chatbot, HKChat, in November. HKGAI's first model, HKGAI-V1, was described as a step towards building sovereign AI. The upcoming V3 model's ability to run on Chinese chips will support private deployments. HKGAI's experience could be extended to other markets, adapting the model to different contexts. Hong Kong is a good testing ground because of its legal system and dynamic environment. HKGAI is working with mainland companies to promote its model in Southeast Asia. HKChat has over 700,000 registered users. The lab plans to commercialize the technology. The center was also considering bringing in equity investors and could – as the AI sector continued to expand – pursue an initial public offering within five years, Guo said.