SINGAPORE (Bernama): South-East Asia’s digital economy is projected to grow 17 per cent year-on-year to reach US$368 billion (US$1=RM4.08) in 2026, driven by the rapid adoption of artificial intelligence (AI), according to the 11th annual e-Conomy SEA report.
The report, released on Wednesday by Google, Temasek and Bain and Company, indicated that the region's digital economy is expected to exceed US$1 trillion by 2035.
The annual report examined key trends and outlined the outlook for the technology landscape across ten countries: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Brunei, Cambodia, Laos and Myanmar.
It noted that generative AI adoption in the region has reached 243 million people, representing 58 per cent of the working population, and has scaled four times faster than mobile internet in less than three years.
"Enterprise AI usage is strongest in more mature markets, driving 45 per cent to 60 per cent of usage in Singapore and Malaysia.
"As people in Southeast Asia move from simple searches to delegating complex tasks to AI agents, demand is projected to surge by up to 60-fold by 2030," said a statement issued by Temasek on Wednesday.
According to the report, AI is increasingly embedded across the entire digital consumer journey, with key sectors for growth including e-commerce, online travel, online media, food delivery and digital financial services.
To meet the region's projected AI usage by 2030, the report suggested the need to accelerate agentic AI adoption, scale AI infrastructure, ensure model and energy efficiency, as well as promote economic sustainability.
"Anchoring this trajectory, the upcoming ASEAN Digital Economy Framework Agreement (DEFA) in November 2026 will establish the world's first region-wide digital trade pact, providing a framework that can unlock further growth in the Southeast Asia digital economy," it added.
Temasek Global Investments head of Asia Pacific, Fock Wai Hoong, said translating AI adoption into sustainable growth would require strong governance, disciplined execution and resilient business models.
"Temasek remains committed to the region, investing in businesses with proven models and helping them create long-term value through our capital, networks, and partnerships," he said.
Meanwhile, Google managing director for Southeast Asia and South Asia Frontier Markets, Nitin Gajria, said the region stands out globally because of its pragmatic optimism towards AI, driven by proven utility, growing familiarity and real productivity.
"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.
"Unlocking that full potential will require clear governance, transparent capabilities, and an unwavering commitment to responsible AI deployment," he added.
-- BERNAMA
