Southeast Asia’s digital economy will reach $368 billion in gross merchandise value in 2026, up 17% year on year, and the new e-Conomy SEA report identifies generative AI as a central driver of that growth. The 11th annual report, released this week by Google, Temasek and Bain & Company under the title “Building the Intelligent Economy”, finds the generative AI Southeast Asia growth story reaching 243 million daily users — 58% of the working population — with adoption scaling four times faster than the mobile internet did.
Southeast Asia’s digital economy hits $368 billion on generative AI momentum
The report puts the region’s digital economy firmly on track to exceed $1 trillion by 2035, with Reuters citing the report’s more precise figure of $1.14 trillion at roughly 13% annual growth. This edition introduces a new benchmark for the AI economy — tokens, the AI equivalent of gross merchandise value — and projects that growing confidence in agentic commerce will drive growth of up to 60-fold in regional AI usage by 2030.
Generative AI Southeast Asia: adoption is no longer a pilot project
The scale of adoption is what sets this year’s report apart. In under three years, generative AI has reached 243 million daily users across the region — a pace Google managing director Nitin Gajria describes as reflecting the region’s “pragmatic optimism towards AI driven by proven utility, growing familiarity, and real productivity”.
But the report is careful to distinguish reach from depth. Current regional usage sits at roughly 10% of US levels — Reuters’ reporting puts it at 5 million AI tokens per capita in Southeast Asia, against 60 million in the US and 14 million in Europe. Consumers account for about 60% of regional tokens, mostly for everyday work and study tasks, while enterprise workloads remain strongest in the more mature markets, driving 45% to 60% of usage in Singapore and Malaysia. As Bain partner Florian Hoppe puts it: “Southeast Asia’s AI story is shifting from how many people use it to how deeply they use it. Adoption is already among the fastest the region has seen, yet usage per person is a fraction of US levels, and most users remain on free tiers.”
The regional mood is unusually optimistic. 62% of consumers report greater trust in AI tools today than a year ago, driven by proven track records (56%), growing familiarity (55%) and output accuracy (53%). The report describes the region’s stance as pragmatic optimism — a willingness to delegate to AI that stops short of blind faith.
Sector by sector: where AI is moving the money
The report’s five mainstay sectors all show AI embedded directly in the consumer journey:
E-commerce ($226 billion GMV, +18% YoY) remains the region’s primary growth engine. 31% of searches are now multimodal, and 69% of shoppers use AI to compare complex purchases such as electronics. With 93% of consumers trusting AI in their purchasing journeys, personalized experiences are delivering a 10% year-on-year conversion lift and order-value uplifts of up to 75%. Singapore leads the region with nearly 16% online retail penetration.
Online travel ($59 billion GMV, +10% YoY) has seen a changing of the guard in trip planning: generative AI platforms have overtaken social media as the second-most-used tool for complex itineraries, capturing 26% of planning journeys compared with 23% for social media — evaluating options and generating personalized itineraries.
Online media ($44 billion revenue, +22% YoY) is the region’s fastest-growing sector. AI is making digital advertising sharper and more efficient, producing a 10 to 20% uplift in quality engagement, while commerce media on e-commerce platforms has scaled into a $4 billion market.
Mobility and food delivery ($40 billion GMV, +15% YoY) has seen AI move from back-end dispatch to front-end product innovation — predictive home-screen suggestions, voice-assisted bookings and smarter routing are driving up to a 28% surge in ride-hailing.
Digital financial services ($1,650 billion in gross transaction value, +16% YoY) are applying AI across credit assessment and real-time fraud detection, expanding credit access and personalized recommendations alongside human advice. Digital lending balances grew 22% to $116 billion, and Singapore leads digital wealth platform adoption with active user penetration nearly triple the next-ranked market.
Agentic commerce: why trust is the unlock
The report’s central bet for the next phase is agentic commerce — AI agents that don’t just answer questions but complete multi-step tasks, from comparing prices to finishing purchases. The groundwork is already laid: 72% of users rely on everyday automations such as price tracking, and 75% say they would let AI agents autonomously find the best prices and complete purchases on their behalf.
That willingness is conditional. 44% of consumers demand robust privacy protections, and 30% require the ability to undo an autonomous action. “As people move from basic queries to trusting AI agents with autonomous tasks, Southeast Asia has a unique window to lead the world in agentic commerce,” Gajria said.
Four conditions that must hold for up to 60-fold AI usage growth
For AI usage to scale by up to 60-fold by 2030, the report says four things have to happen at once:
Accelerated agentic adoption and sustainable economics. Businesses need to move from single-turn tools to multi-step agentic workflows, backed by falling inference costs and demonstrable ROI, so companies of all sizes can adopt AI sustainably.
Scaled AI infrastructure. Meeting the demand trajectory requires roughly a tripling of data center capacity over five years, with AI workloads taking the dominant share. Capital is already flowing: private capital deal value in AI compute and digital infrastructure hit $20 billion over 12 months, led by the $11 billion acquisition of ST Telemedia Global Data Centres. Reuters reports built capacity reached 5.8 gigawatts by mid-2026, up from 4 gigawatts at the end of 2025.
Model and energy efficiency. National frameworks must guide next-generation facilities — Singapore’s binding Power Usage Effectiveness rules under the Digital Infrastructure Bill, paired with expanded clean-energy access like Malaysia’s Corporate Renewable Energy Supply Scheme (CRESS) model.
Unified regional governance. The ASEAN Digital Economy Framework Agreement (DEFA), due for signing at the 49th ASEAN Summit in November 2026 in Manila, is billed as the world’s first region-wide digital trade pact — covering digital trade, cross-border data flows, digital identity, e-payments and cybersecurity across the bloc’s 11 member states.
What this means for businesses building on AI in Southeast Asia
Three practical takeaways emerge from the findings. First, design for agentic workflows, not just search: with 75% of consumers willing to let AI agents complete purchases, in-app assistants and autonomous task completion are where consumer behavior is heading — which points, as an illustrative consideration, toward clean product data and reliable checkout APIs as sensible implementation work. Second, treat trust as a product requirement — privacy safeguards matter to 44% of consumers and reversibility to 30%, making both relevant product considerations as agentic purchasing grows. Third, factor infrastructure and policy into expansion plans: data center capacity, energy rules and the DEFA timetable are inputs to growth, not background detail.
The funding data underscores the shift. Private funding for digital applications has stabilized at about $8 billion a year, but companies with AI at the core of their products captured 80% of deal value in the last six months, up from 30% in the second half of 2024 — AI is where the capital is concentrating.
Caveats and open questions
Several limits deserve stating plainly. The $1 trillion-by-2035 figure and the 60-fold usage projection are forecasts, not observations — the sponsors’ own releases give them as “exceed $1 trillion” (Reuters cites $1.14 trillion) and “up to 60-fold by 2030” respectively.
Coverage excludes Timor-Leste for data-quality reasons, and the study spans ten countries. The report is produced by Google, Temasek and Bain & Company — independent corroboration exists (notably Reuters’ reporting on the headline figures), but TechInAsia notes the available material doesn’t show how these forecasts compare with earlier editions, and TechRepublic’s coverage points to a May 2026 OECD review finding significant differences in cross-border data rules across the region — with Indonesia’s implementing regulations taking effect in January 2027. “AI will create significant opportunities for Southeast Asia’s economy,” said Temasek’s Fock Wai Hoong. “However, translating adoption into sustainable growth will require strong governance, disciplined execution, and resilient business models.”
