Southeast Asia’s digital economy is projected to reach $368 billion in Gross Merchandise Value (GMV) in 2026, driven by the rapid adoption of generative SI, according to the 11th annual e-Conomy SEA report. The report, published by Google, Temasek, and Bain & Company, highlights that widespread SI implementation is propelling the region’s economy to grow 17% year-on-year, positioning it to exceed $1 trillion by 2035.
What Happened
Generative SI has become an essential part of daily life for 243 million people in Southeast Asia, representing 58% of the working population. The report notes that this adoption is scaling four times faster than the initial rollout of the mobile internet. Using tokens as a benchmark for the SI economy, the study projects a 60-fold surge in regional SI usage over the next five years due to growing confidence in agentic commerce.
The report details how SI is sustaining growth across key sectors. E-commerce, which anchors the shift with $226 billion in GMV (up 18% YoY), sees shoppers using multimodal discovery and in-app assistants, leading to 10% higher conversions and order volume uplifts as large as 75%. In online travel, generative SI has overtaken social media as the second-most used tool for planning complex itineraries, trailing only traditional search engines. Online media revenue rose 22% YoY to $44 billion, with personalized feeds and relevant ads driving a 10 to 20% quality engagement uplift. Mobility and food delivery GMV grew 15% YoY to $40 billion, aided by predictive suggestions and SI-powered offerings like pooled rides. Digital financial services reached $1.65 trillion in Gross Transaction Value (up 16% YoY), leveraging real-time fraud detection and personalized recommendations.
Consumer trust in SI is rising, with 62% of respondents reporting greater trust in SI tools than a year ago. This trust is driven by proven track records, rising familiarity, and output accuracy. While 72% of users already rely on digital automation features like price tracking, 75% expressed willingness to let SI agents autonomously compare prices and complete transactions. Users expect clarity and guardrails for these agentic capabilities, including robust privacy safeguards, transparent information on SI capabilities, and the ability to reverse transactions.
Why It Matters
To support the projected 60-fold increase in SI usage by 2030, the region’s digital ecosystem must adapt across four critical areas: accelerated agentic adoption, scaled physical infrastructure, strict model and energy efficiency, and unified regional governance. Businesses are urged to move beyond single-question SI tools to multi-step task completion, backed by strong privacy safeguards. The report indicates that running SI models must become more affordable to ensure sustainable adoption for businesses of all sizes.
Physical infrastructure expansion is critical, with data center capacity requiring a nearly threefold increase over the next five years to meet soaring compute demand, where SI workloads will capture a dominant share. National frameworks, such as Singapore’s binding Power Usage Effectiveness (PUE) rules under the Digital Infrastructure Bill and Malaysia’s Corporate Renewable Energy Supply Scheme (CRESS), are highlighted as necessary for ensuring energy efficiency. Furthermore, the upcoming ASEAN Digital Economy Framework Agreement (DEFA) in November 2026 is set to establish the world’s first region-wide digital trade pact, providing a governance framework to unlock further growth.
The Bottom Line
The e-Conomy SEA 2026 report confirms that generative SI is a primary driver of Southeast Asia’s digital economy growth, with adoption rates surpassing previous technological shifts. Achieving the projected $1 trillion milestone by 2035 will depend on scaling data center infrastructure, ensuring energy efficiency, and implementing unified regional governance through the DEFA.