Artificial Intelligence Propels Southeast Asia Toward $368 Billion Digital Economy
Generative artificial intelligence is sweeping across Southeast Asia, touching the daily lives of 243 million people and scaling four times faster than the rollout of the mobile internet. According to the 11th edition of the annual e-Conomy SEA report published by Google, Temasek, and Bain & Company, this widespread adoption is pushing the region’s digital economy toward a total gross merchandise value of $368 billion in 2026.
For families across the region, this technological shift is changing how people work, shop, and travel. The report shows that 58 percent of the working population in Southeast Asia actively uses generative artificial intelligence. This momentum is putting the digital economy on a clear path to exceed $1 trillion by 2035, driven by a 17 percent year-on-year growth rate.
Everyday Sectors Feel the Impact
E-commerce remains the primary engine of this growth, projected to reach $226 billion in gross merchandise value in 2026, which represents an 18 percent increase from the previous year. According to the report, shoppers are using multimodal discovery and in-app assistants to navigate complex purchases, helping commerce platforms achieve a 10 percent year-on-year conversion lift. Closer to home, online travel is projected to reach $59 billion in gross merchandise value, up 10 percent year-on-year, with generative intelligence platforms now capturing 26 percent of trip-planning journeys.
Other vital sectors are seeing steady gains as well. Digital financial services are projected to grow to $1.65 trillion in gross transaction value in 2026, marking a 16 percent year-on-year increase through real-time fraud detection and broader credit access. Meanwhile, mobility and food delivery services are projected to reach $40 billion in gross merchandise value, up 15 percent, saving time for communities through smarter routing and predictive suggestions.
Rising Trust and Infrastructure Investments
Consumer confidence in these tools is climbing steadily across communities. The report notes that 62 percent of users in Southeast Asia report greater trust in artificial intelligence tools compared to a year ago, fueled by proven track records, rising familiarity, and output accuracy. Furthermore, 75 percent of users express a willingness to let automated agents compare prices and complete transactions on their behalf.
To support this growing demand, private capital in artificial intelligence compute and digital infrastructure reached $20 billion over the past 12 months. Major transactions, including an $11 billion deal involving STT GDC, are fueling infrastructure growth across the region. Singapore alone is projected to host $31 billion in digital economy gross merchandise value in 2026, as the country adds green energy capacity to its existing compute base.
Online Media and Venture Funding Realities
Online media is projected to reach $44 billion in revenue, marking a 22 percent year-on-year increase. The sector is personalizing content feeds and connecting audiences with more relevant ads, yielding a 10 to 20 percent quality engagement uplift as commerce media becomes a $4 billion market.
While infrastructure investments have surged, the broader funding landscape presents an uneven picture. Private funding for the region’s digital applications sector has stabilized at about $8 billion a year, with companies holding core AI products capturing 80 percent of deal value in the past six months, up from 30 percent in the second half of 2024. Meanwhile, 2025 recorded 421 private deals, representing a 28.4 percent drop from the previous year.
Sources
- Southeast Asia’s digital economy to hit $368 billion
- Southeast Asia’s Digital Economy Is Getting Bigger, Not Broader
- Southeast Asia digital economy can reach $368B GMV in 2026, AI usage to surge – TNGlobal
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