Southeast Asia’s digital economy just hit a major milestone, with a new report projecting it will surpass $300 billion in gross merchandise value by the end of 2025. The e-Conomy SEA 2025 report, released today by Google, Temasek, and Bain & Company, shows the region’s online sectors have grown 7.4 times in value and 11.2 times in revenue over the past decade. This growth is fueled by rising AI adoption, especially in e-commerce, which is expected to expand 16% next year thanks to AI tools and video content. For Indonesia, this means a starring role—its tech scene is driving much of the AI push, with the country’s digital economy on track to exceed $130 billion by 2025, powered by high internet penetration among its young population.

Private funding tells a more mixed story. Investments in Southeast Asia’s digital firms rose 15% to $7.7 billion in the year ending June 2025, but that’s below the global average of 25%. Still, AI is a bright spot: over $2.3 billion flowed into more than 680 regional AI startups in the past year, making up 30% of private funding in the first half of 2025. This matters because it highlights how AI is attracting big bets from global players, like new cloud and data center investments in the region, while also pointing to challenges in keeping pace with worldwide funding trends. Indonesia is benefiting here too, with developments like the launch of an education super-app at EduTech Asia 2025 and partnerships boosting local EV production and wireless networks.

These updates signal a shift toward sustainable, AI-powered growth, but funding lags could slow some startups if global investors stay cautious. Watch for upcoming AI policy announcements from Indonesia and potential new funding rounds in fintech and e-commerce, which could accelerate or reveal cracks in the momentum.