Digital economy to reach $39.6b in 2026: report
Singapore’s digital economy is on track for another year of strong growth, driven by expanding artificial intelligence adoption, infrastructure investment and rising demand for digital services.
The sector is expected to grow by 8% year over year to reach S$39.6 billion (US$31 billion) in gross merchandise value in 2026. By 2035, the market could expand to S$75.3 billion (US$59 billion), supported by demand for AI semiconductors and continued development in digital mobility.
Emerging mobility services, including autonomous shuttles and licensed cross-border ride-hailing, are expected to become increasingly important as the region develops more connected transport networks.
AI adoption reaches most of Singapore’s workforce
Generative AI is already being used by approximately 70% of Singapore’s working population, equivalent to around 3.2 million people. Adoption per person is estimated to be almost half the level recorded in the United States and roughly twice the rate seen across Europe.
Businesses are also playing a larger role in driving AI usage. In Singapore and Malaysia, enterprises account for between 45% and 60% of total usage, a higher proportion than in many other Southeast Asian markets where consumers remain the primary users.
The figures highlight Singapore’s position as one of the region’s most mature technology markets, with companies moving beyond experimentation and beginning to integrate AI into daily operations, customer services and decision-making.
Infrastructure investment accelerates
Singapore has captured a significant share of Southeast Asia’s AI infrastructure investment, particularly from platforms headquartered in the city-state. This has strengthened its role as a regional hub for data centers, cloud services and other digital infrastructure.
To address the rising energy requirements of advanced computing, the country has set aside an additional 200 megawatts of green energy. The allocation supplements an existing computing capacity of approximately 1.4 gigawatts and reflects the growing need to balance digital expansion with sustainability goals.
Strong performance across consumer services
Singapore also leads the region in several consumer-focused digital segments. Online retail now represents nearly 16% of total retail activity, while participation in digital wealth platforms is close to three times higher than in the next-ranked Southeast Asian market.
However, high adoption rates will not automatically translate into greater productivity or profitability. The next stage of growth is expected to depend on how effectively businesses redesign their workflows, organizational structures and products around AI.
Across Southeast Asia, the wider digital economy is forecast to grow 17% in 2026, reaching S$469.8 billion (US$368 billion). By 2035, it is projected to surpass S$1.28 trillion (US$1 trillion), underlining the region’s expanding importance in the global technology landscape.
