Southeast Asia’s digital economy is set for another year of strong expansion, with total digital sales volume expected to rise 17 per cent to US$368 billion in 2026, according to the latest e-Conomy SEA 2026 report by Google, Bain & Company and Temasek.
The report projects that the region’s gross merchandise value (GMV), the total value of goods and services sold through digital platforms, will continue growing at an annual rate of around 13 per cent. At this pace, GMV is expected to reach US$1.14 trillion by 2035, highlighting the region’s substantial long-term digital growth potential.
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Investor activity has also strengthened despite a decline in private funding deals. Southeast Asia recorded 421 private funding deals involving digital economy companies in 2025, a 28.4 per cent decline from the previous year. However, funding rebounded sharply in the first half of 2026, with the digital economy attracting US$21 billion, nearly double the US$11 billion raised throughout 2025.
The funding surge was largely driven by major data centre investments, including a US$11 billion deal involving STT GDC and a US$5 billion deal involving DayOne. The region’s built data centre capacity consequently expanded from 4.0 gigawatts at the end of 2025 to 5.8 gigawatts in the first half of 2026, reflecting growing demand for digital infrastructure.
Despite increasing investment in artificial intelligence, the report identified a significant AI adoption gap between Southeast Asia and more developed markets. The region currently consumes around five million AI tokens per capita, compared with 60 million in the US and 14 million in Europe. The disparity points to considerable room for AI adoption and related digital services to expand across Southeast Asian markets.
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The region’s capital markets have also shown signs of recovery. Initial public offering (IPO) proceeds reached US$8.5 billion in the 12 months to June 30, 2026, more than twice the US$3.6 billion recorded during the previous period. Increased listing activity in Singapore and Malaysia contributed significantly to the improvement.
Overall, the report indicates that Southeast Asia remains one of the world’s fastest-growing digital markets. Expanding e-commerce and digital services, renewed investor confidence, rapid data centre development, and recovering capital markets are supporting the region’s growth. Meanwhile, relatively low AI adoption suggests that emerging technologies could provide another major source of expansion over the coming years.