Hong Kong tech founder Sheryar Shah argues that a bilateral US-HK AI access deal is essential to restore Claude Fable 5 access and maintain global competitiveness.
The reality of running a tech firm in Hong Kong in 2026 feels like owning a Ferrari in a city where the speed limit is permanently set to 20 kilometers per hour. We have the capital, we have the world-class talent, and according to the 2025 IMD World Competitiveness Ranking, we are still holding strong as the third most competitive economy on the planet. But there is a ceiling pressing down on us that our peers in London and Singapore don’t have to check for every morning when they log into their IDEs. That ceiling is the Fable 5 ban, and the only way to break through it is a formal, bilateral AI access deal between the United States and Hong Kong.
I spend my nights looking at the latency charts of our API calls. Every time we routed a request through a VPN or a "neutral" third-party proxy to get some semblance of the high-reasoning capabilities provided by Anthropic’s Claude Fable 5, we were essentially betting our company’s future on a loophole. When that loophole closed, a significant chunk of our competitive advantage evaporated. It wasn’t just about a chatbot; it was about the underlying cognitive infrastructure that powers our automated legal review and our real-time financial sentiment analysis.
We are living in an era where compute is the new oil, but high-reasoning model access is the new electricity. Without it, your "smart" city starts to look very dim, very quickly. It is time we stop dancing around the "security" rhetoric and start talking about the economic necessity of a bilateral framework. There is no middle ground here—either we have the tools to build, or we are merely consumers of a second-rate digital reality.
On paper, Hong Kong is an AI powerhouse. The POD Research Institute recently highlighted that we are the 4th most digitally mature economy globally. We have the data density and the financial infrastructure to be the Silicon Valley of Asia. However, the IMD rankings don't measure the "frustration index" of a developer who can’t access the latest weights of a frontier model because of a ZIP code.
While the United States private AI investment skyrocketed to $109.1 billion by the end of 2024, nearly twelve times what was seen in China and far outstripping the UK, Hong Kong has been left in a strategic vacuum. We aren't the "mainland" in terms of our legal system or our data privacy laws—we have the Personal Data (Privacy) Ordinance (PDPO) which is world-class—but the US Department of Commerce treats us as a unified risk profile under the latest 2025 export control updates.
This misalignment is costing us. When I talk to fellow founders in Central or the Cyberport, the sentiment is the same—we are being penalised for a geopolitical tension we didn't create, using rules that don't reflect our local regulatory reality. A bilateral deal isn't a "nice-to-have" luxury; it is the fundamental bridge required to prevent Hong Kong’s tech sector from becoming a legacy museum of 2023-era LLMs.
The danger of this mirage is that the city *appears* functional. Our banks are still running, our logistics companies are still moving crates, and our stock exchange is still ticking. But underneath the surface, the rot of "model obsolescence" is setting in. While our rivals are automating the hard reasoning of middle management, we are still hand-holding 2024-era chatbots.
If you want to see what our future should look like, you only need to look at the Memorandum of Understanding (MOU) signed between the US and the UK in September 2025. That agreement wasn't just about "safety" or "ethics" in the abstract. It was a commitment to promoting technology prosperity and ensuring that UK-led AI adoption was supported directly by the US technology stack. It recognized that for a partner to be effective, they must be empowered.
Similarly, Singapore has emerged as the definitive Asian AI hub because they secured specific agreements with OpenAI and Google, backed by "Shared Principles and Collaboration" with the US government. Singapore didn't just wait for the apps to become available; they proactively negotiated the terms of access to ensure their startups had a "First-in-Asia" advantage. They turned their geographic neutrality into a strategic leverage point.
Why isn't Hong Kong at that table? We have the same, if not higher, level of financial integration with the Western world. Our stock exchange is a global pillar. Our lawyers are trained in common law. The "trust gap" that the US Commerce Department cites is something that can be bridged by a bilateral agreement that specifies exactly how Fable 5 and subsequent models (like the rumoured GPT-6) are used within Hong Kong’s borders.
If Singapore can navigate the complexities of being a bridge between East and West while maintaining a direct pipeline to Silicon Valley's most restricted assets, there is no logical reason why Hong Kong cannot do the same. We have decades of experience as a trusted intermediary.
A bilateral deal doesn't have to be a "blank cheque" for access. We could propose a "Hong Kong AI Sandbox"—a ring-fenced compute and access environment where frontier models like Fable 5 are available to verified Hong Kong entities.
Under this model, the US Bureau of Industry and Security (BIS) could have visibility into the KYC (Know Your Customer) protocols managed by Hong Kong’s Office of the Government Chief Information Officer (OGCIO). If the concern is "leakage" to restricted entities, the solution is better plumbing, not shutting off the water entirely. We have the technical capability to implement hardware-level attestation and sovereign cloud environments that ensure Fable 5 is only serving the legitimate Hong Kong market.
This sandbox would act as a proof of concept. It would demonstrate that Hong Kong can host the world's most sensitive algorithms without them "drifting" across borders. By creating a high-trust, high-transparency zone, we give the US Department of Commerce the "off-ramp" they need from their current policy of blanket denial.
When people talk about the "ban," they often think of it as a consumer inconvenience. "Oh, Sheryar, can't you just use GPT-4o or a local open-source model?" The answer is a resounding "No." In the professional services sector—which accounts for 93% of Hong Kong’s GDP—the difference between the reasoning capabilities of Fable 5 and its closest mid-tier competitor is the difference between an automated process and a manual one.
For a mid-sized law firm in Admiralty, using Fable 5 could reduce the time spent on contract discovery by 70%. Without it, they are competing against Singaporean firms that have integrated these tools via their national "AI SG" initiatives. The "access gap" is creating a direct productivity tax on Hong Kong businesses. We are forcing our most productive citizens to work with blunt tools while their rivals use scalpels.
If we estimate that a single Fable 5 "seat" saves a knowledge worker 5 hours a week, and there are roughly 500,000 knowledge workers in Hong Kong’s finance and legal sectors, the ban is effectively costing this city millions of man-hours in lost productivity every single month. That is a massive weight to carry in a global economy that is moving at the speed of light.
We are also seeing a quiet but persistent exodus of AI researchers. If you are a world-class engineer, why would you base your startup in a city where the best tools are geofenced? I’ve seen three of our promising interns leave for Singapore or London in the last year specifically because they wanted to work on "unfiltered" frontier model integration.
A bilateral deal would signal to the global talent pool that Hong Kong isn't just a financial hub, but a "Safe Harbour" for AI development. It would tell the world that we have the diplomatic and technical maturity to handle the most powerful models on the planet.
Talent follows access. If the access is in London, the talent goes to London. If the access is in Singapore, the talent stays in Singapore. By being the only major Asian financial hub without a clear AI access deal, we are effectively subsidizing the growth of our competitors' talent pools.
The US Commerce Department’s stance often ignores the robustness of Hong Kong’s internal regulations. The Personal Data (Privacy) Ordinance (PDPO) already provides a comprehensive framework for data protection that is often more stringent than what exists in many US states.
If the goal of export controls is to prevent the misuse of AI for surveillance or data harvesting, the PDPO already does that. In fact, a bilateral deal could include an "Equivalency Clause," where the US recognizes the PDPO as a sufficient safeguard for the deployment of high-reasoning models. This would remove the need for redundant, blanket bans that stifle legitimate innovation.
We need to remind our counterparts in Washington that Hong Kong has a long history of being a "Special Status" entity for a reason. Our legal system is the foundation of our stability. If they trust our courts to handle multi-billion dollar international disputes, they should trust our regulatory framework to oversee the deployment of Claude Fable 5.
The PDPO is not just a piece of legislation; it is a culture of compliance that is baked into every major Hong Kong institution. We don't play fast and loose with data here—the penalties are too high, and the reputational stakes are even higher.
US tech companies are losing out too. By banning Fable 5 in Hong Kong, the US government is essentially handing the market over to local and regional alternatives on a silver platter. While these alternatives might not yet match Fable 5’s reasoning, they are improving every day. Once a Hong Kong enterprise builds its entire workflow on a non-US stack, they are unlikely to switch back just because a ban is lifted three years late.
The US-HK tech relationship has always been symbiotic. We provide the gateway to Asian markets and a sophisticated testing ground for high-end services. By cutting off AI access, the US is severing a vital link in its own tech ecosystem. A bilateral deal would restore this synergy, allowing US companies like Anthropic and OpenAI to monetize their R&D in one of the world's most lucrative markets while ensuring the US stays the "provider of choice" for the next generation of Hong Kong’s digital infrastructure.
Every enterprise that switches to a local model because they can't access Claude is a customer lost to the US economy for the long term. This isn't just about security; it's about commercial dominance. The US is essentially boycotted its own most advanced sector in one of the world's most concentrated pools of corporate capital.
To make this bilateral deal a reality, we need to move beyond complaining and start proposing.
There is a misconception that "sovereignty" means doing everything yourself. In the modern world, true sovereignty is the ability to choose your partners and the terms of those partnerships. Hong Kong’s path to AI sovereignty doesn't lie in building a 2026-capable model from scratch—that would take billions of dollars and years we don't have. Our path lies in negotiating a partnership with the current world leaders.
A bilateral deal allows us to maintain our unique identity as a global city while benefiting from the most advanced technology on earth. It prevents us from being forced into a dependency on less capable local models that may have their own sets of biases and restrictions.
Hong Kong is at a crossroads. We can either accept our place as a "second-tier" tech city, perpetually one step behind our global rivals, or we can fight for the access that our economic status deserves. The Fable 5 ban is a symptom of a larger geopolitical friction, but it is a symptom that we have the power to treat through proactive diplomacy and technical safeguards.
I founded my company in this city because I believe in the unique energy of Hong Kong—the ability to bridge East and West, the speed of its markets, and the brilliance of its people. But that energy is being throttled. We don't need charity; we need a fair deal. We need a Bilateral AI Access Agreement that recognizes Hong Kong’s unique position and allows us to deploy the best tools in the world to build the future of Asia.
Every day we wait is a day our competitors in Singapore and London pull further ahead. The time for the US-Hong Kong AI deal isn't "eventually"—it is right now. We have the data, we have the talent, and we have the legal framework. All we are missing is the political will to bridge the gap.
At SheryarShah.com, we are committed to documenting this fight. We don't just want access for ourselves; we want to ensure that Hong Kong remains the definitive tech bridge for the world in the age of intelligence. The choice is clear: negotiate a path forward or watch as the most competitive economy in Asia is left in the dark. We choose the light. We choose the future. We choose the deal.
"Progress is not inevitable; it is the result of negotiated access to the tools of the future." - Sheryar Shah, June 2026.
To those who say the impact of the ban is exaggerated, let us look at the numbers again.
The numbers don't lie. The ban is an economic anchor. The bilateral deal is the only way to cut the chain.
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