PHILIPPINES — Southeast Asia’s digital economy is projected to grow by 17 percent year-over-year, reaching a staggering $368 billion in gross merchandise value in 2026. A recent report by Google, Temasek, and Bain & Company highlights artificial intelligence as the primary catalyst driving this robust regional expansion.
AI Fuels Record Digital Growth
The 11th edition of the e-Conomy SEA report reveals that generative AI adoption has reached mainstream levels, with 243 million people actively using the technology. This represents 58 percent of the working population, and projections indicate the digital economy will surpass $1 trillion by 2035.
Despite looming geopolitical and macroeconomic uncertainties, growth remains highly resilient, though it marks a slight slowdown from the previous year. High inflation is dampening consumer spending, prompting digital businesses to increasingly leverage AI tools to target consumers and optimize overall spending efficiency.
Sector-by-Sector Expansion
E-commerce leads the massive regional expansion with $226 billion in GMV, representing an 18 percent increase. Online media followed with $44 billion, up 22 percent, while digital financial services demonstrated immense strength, reaching $1.65 trillion in gross transaction value. Online travel and mobility sectors also posted steady double-digit growth.
The report notes that competition remains vibrant as core sectors consolidate around established platforms. Emerging models based on quick commerce, commerce advertising, and electric vehicles in mobility are opening new competitive fronts, while AI provides consumers with innovative ways to discover and evaluate products.
Rising Trust in AI Commerce
Consumer attitudes toward artificial intelligence are rapidly evolving across the region. Approximately 62 percent of Southeast Asian users report trusting AI tools significantly more than they did a year ago, driven by better outputs and increased familiarity with the technology's daily applications.
Furthermore, 75 percent of users are willing to delegate tasks like price comparison and purchasing to autonomous AI agents. However, users remain pragmatic, demanding strict privacy safeguards, clear information regarding AI limitations, and the ability to reverse transactions to ensure safety and build confidence.
Investments and Infrastructure Needs
Investment trends heavily favor AI-focused companies, which captured 80 percent of private deployment in the last six months, a massive jump from just 30 percent in late 2024. Digital infrastructure investments also reached $20 billion over the last twelve months to support growing demands.
To sustain this momentum, the report calls for a threefold expansion in data center capacity over the next five years. The upcoming ASEAN Digital Economy Framework Agreement, scheduled for November 2026, is positioned as a critical region-wide pact to support unified governance and sustain future growth.
