Key findings from this year’s report include:

1. AI is increasingly embedded across the entire digital consumer journey

Growth across key sectors is anchored in the value AI brings to business-consumer interactions, specifically in enhancing discovery, research, and conversion:

E-commerce ($226B GMV, +18% YoY) remains the region's primary growth engine. Consumer habits are shifting rapidly, with 31% of searches now multimodal and 69% of shoppers using AI to compare complex purchases like electronics. With 93% of consumers already trusting AI in their purchasing journeys, AI is increasingly shaping how products are discovered, compared and bought online. Initial case studies show businesses are already reaping tangible benefits, with AI helping commerce players achieve a 10% YoY conversion lift and up to a 75% higher average order value. This accelerating adoption is helping drive Singapore's regional leadership, which now sits at nearly 16% online retail penetration.

Online travel ($59B GMV, +10% YoY): While search engines remain the primary starting point, travelers typically interact with more than 20 digital touchpoints before booking. Within this fluid journey, social media continues to inspire through visual connection and peer validation, but standalone GenAI platforms have overtaken it as the secondary tool of choice. Capturing 26% of planning journeys compared to social media's 23%, GenAI is now the preferred way to evaluate multiple options, reduce the friction across the full planning journey, and generate personalized, custom itineraries.

Online media ($44B Revenue, +22% YoY): Encompassing digital advertising, video streaming, and gaming, online media continues to be the region's fastest-growing sector. This rapid expansion is heavily driven by digital advertising, where AI is making campaigns sharper and more efficient. The technology is allowing brands of all sizes to drive high-quality consumer engagement, seeing a 10 to 20% uplift without needing massive budgets. Simultaneously, the broader digital ecosystem is diversifying, with commerce media on e-commerce platforms scaling into a $4 billion market.

Mobility & food delivery ($40B GMV, +15% YoY): AI is switching lanes from back-end dispatch to front-end product innovation. Platforms are actively transforming the customer experience with predictive home-screen suggestions and voice-assisted bookings. This smarter product layer, paired with AI-driven route optimization, is unlocking untapped demand and resulting in up to a 28% surge in ride-hailing.

Digital Financial Services (DFS) ($1,650B GTV, +16% YoY): Digital payments are now deeply embedded in daily life, driving Gross Transaction Value to a projected $1,650 billion alongside a 22% year-over-year growth in digital lending balances to $116 billion. AI is increasingly being applied across customer acquisition, credit assessment and fraud detection,helping providers reach first-time or unbanked borrowers, detect fraud in real time, and expand lending and wealth management offerings to existing payment users. Singapore leads digital wealth platform adoption, with active user penetration nearly triple the next-ranked market.

2. Consumer openness to agentic AI is growing

As confidence grows, 72% of users currently rely on everyday automations, while 75% express willingness to let AI agents autonomously find the best prices and complete purchases on their behalf. This shift reflects pragmatic optimism towards AI—with 62% reporting greater trust in AI tools today than a year ago. Driven by proven track records (56%), growing familiarity (55%), and output accuracy (53%), this rising trust signals a clear runway for monetization. While trust in AI is increasing across Southeast Asia, it remains contingent on responsible deployment, including robust privacy protections (demanded by 44%) and the ability for users to undo autonomous actions (required by 30%).

3. Capital is broadening across AI infrastructure and applications

Private funding for the region’s digital applications sector has stabilized at approximately $8 billion annually, while AI-related investments have grown within that funding mix. Companies with core AI products captured 80% of deal value in the last six months (up from 30% in H2 2024). Beyond applications, private capital deal value in the region’s AI compute and digital infrastructure sector was $20 billion over the last 12 months, led by the $11 billion acquisition of ST Telemedia Global Data Centres. Together, these flows illustrate the breadth of capital required across the AI ecosystem, from enabling infrastructure to applications and enterprise adoption.

4. Achieving AI Adoption at scale relies on infrastructure, efficiency, policy, and economics

To meet Southeast Asia’s projected 60-fold in AI usage by 2030, four critical conditions must be met:

Accelerated agentic adoption: Maximizing productivity requires transitioning from single-turn tools to multi-step agentic workflows, backed by model reliability, robust privacy, and supportive governance.

Scaled AI infrastructure: Meeting soaring demand requires a ~3x expansion in data center capacity over the next five years, with AI workloads capturing a larger share of total infrastructure.

Model & energy efficiency: Scaling sustainable compute requires national frameworks to guide the development of next-generation data centers—such as Singapore’s binding Power Usage Effectiveness (PUE) requirements under the Digital Infrastructure Bill—paired with expanded clean energy access, like Malaysia’s Corporate Renewable Energy Supply Scheme (CRESS) model.

Sustainable economics: Falling inference costs and demonstrable returns on investment (ROI) are vital to scaling productivity gains across regional enterprises.

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.

“Southeast Asia is entering an AI decade defined by rapid adoption and immense economic opportunity. 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,” said Nitin Gajria, Managing Director for Southeast Asia and South Asia Frontier Markets, Google.

“AI will create significant opportunities for Southeast Asia’s economy. However, translating adoption into sustainable growth will require strong governance, disciplined execution, and resilient business models. Temasek remains committed to the region, investing in businesses with proven models and helping them to create long-term value through our capital, networks, and partnerships,” said Fock Wai Hoong, Head, Asia Pacific (ex. China & India), Temasek Global Investments.

"Southeast Asia’s AI story is shifting from how many people use it to how deeply they use it. Adoption is already among the fastest the region has seen, yet usage per person is a fraction of US levels, and most users remain on free tiers. Closing that gap will drive the next wave of growth. As token costs fall and enterprise workloads scale, AI capabilities will become increasingly accessible. What will differentiate them is how fast they embed it across the customer journey, from discovery to conversion,” said Florian Hoppe, Partner, Bain & Company. 

Singapore: Widening its AI lead in Southeast Asia

Singapore, the region’s primary hub, continues to solidify its position as Southeast Asia's leading AI powerhouse, outpacing its peers in adoption maturity, usage depth, and governance frameworks. The country’s digital economy GMV is projected to reach $31 billion in 2026, up 8% YoY, and is on track to reach $59 billion by 2035. Growth is strongly supported by AI-driven semiconductor demand and innovations in digital mobility, such as autonomous shuttles and licensed cross-border ride-hailing.

The majority of Southeast Asia’s AI infrastructure funding has been invested into platforms headquartered in Singapore, underscoring the country’s role as the region’s leading hub for AI and digital infrastructure. Singapore is also balancing growing compute demand with sustainability, allocating an additional 200MW of green energy to its 1.4GW compute base. Meanwhile, GenAI penetration has reached 70% of the working population, or 3.2 million people.

Underpinning this success is sustained government investment in capability building and governance. Singapore’s Model AI Governance Framework for Agentic AI and the Safeguards for Agentic Finance at Runtime (SAFR) establish clear guidelines for AI agentic deployment, while initiatives like the National AI Impact Programme aim to train 100,000 individuals by 2029 to sustain the long-term AI economy.

"Singapore’s AI maturity is the result of deliberate, sustained investments across infrastructure, talent, and governance. As Southeast Asia advances toward autonomous decision-making, Singapore serves as a vital proving ground for the region. The blueprints and governance standards developed here can provide a clear pathway for how agentic AI scales safely, responsibly, and equitably across Southeast Asia, " said Nitin Gajria. 

“Singapore’s strengths in governance, digital infrastructure, advanced manufacturing, and talent development position it well to support the next phase of AI-led growth in Southeast Asia’s digital economy. As AI adoption accelerates across the region, sustained investment into AI businesses and infrastructure, together with stronger regional cooperation, will be important to help innovative companies scale and realise Southeast Asia’s AI ambitions,” said Fock Wai Hoong.

“Singapore’s leadership in AI adoption reflects a sustained commitment to governance, investment and innovation, anchored by its National AI Strategy 2.0. Clear frameworks have given businesses the confidence to invest in infrastructure, skills and talent. The result is that per capita AI use is already nearly half the US level and about twice Europe’s, by our estimate. But the real measure of success is shifting from adoption to meaningful business outcomes. As AI becomes more deeply embedded across sectors, the winners will be those that redesign workflows and organizations around it, not how quickly they deploy it. This will be critical to cementing Singapore’s position as a trusted AI hub for the region,” said Florian Hoppe. 

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Media contact: Tay Yan Xin, yan-xin.tay@bain.com