Consumer interest in AI Southeast Asia is three times higher than the global average. Photo credit: iStock/Thicha Satapitanon
The 10th edition of the Google, Temasek, and Bain report expands coverage from six to 10 Southeast Asian markets.
Southeast Asia’s digital economy is expected to surpass $300 billion in gross merchandise value (GMV) by the end of the year.
In their e-Conomy SEA 2025 report, Google, Temasek, and Bain & Company see the region exceeding their forecast 10 years ago by 150%, maintaining a steady growth of 15% year-on-year. They also see the region transforming into a global hotspot for artificial intelligence (AI) because of high adoption among workers and startups and the rapid increase in data center capacity.
For the first time, the yearly report includes four more ASEAN member states, Brunei Darussalam, Cambodia, Lao People’s Democratic Republic, and Myanmar, which account for about 2% of GMV or the sum of goods sold through customer-to-customer and e-commerce platforms. Previous reports only covered six markets: Indonesia, Malaysia, the Philippines, Thailand, Singapore, and Viet Nam.
Revenues are estimated to reach $135 billion this year, driven by innovation and successful monetization strategies.
Over the last 10 years, the report noted that $120 billion in private funding was invested in the digital economy and new internet users reached more than 200 million. Adoption across sectors, such as e-commerce and digital payments, has accelerated. Three in five people shop online, and over 60% of all payments are digital.
Regional cooperation has resulted in increased connectivity in digital financial services. Eight of the 10 ASEAN markets now offer cross-border QR interoperability.
Consumer interest in AI is three times higher than the global average, the report said. Singapore, Brunei, Philippines, Indonesia, Malaysia are in the world’s top 20 list for interest in multimodal AI. Majority of workers surveyed are learning to use AI, while nearly half of them already use it.
Meanwhile, investments in data centers by global players are expected to drive data center capacity in the ASEAN region by 180%, which is higher than the project growth for the rest of Asia and the Pacific. Data centers serve as the backbone of AI.
Singapore is emerging as a center for AI innovation and leads in AI governance. The country is developing local talent and attracting top engineers. Initiatives in the responsible use of AI include “creating a testing starter kit to manage risks in new generative AI applications.”
For the next decade, the report expects growth to be “driven by the acceleration of AI, revival of capital markets, and greater cooperation among SEA (Southeast Asian) nations.” However, global uncertainty poses risks to growth.
“Regulatory support and openness to change are essential for sustaining progress,” the report said. “Effective frameworks must be developed to manage the potential socioeconomic impacts of automation and AI while enabling continued advancement.”
