SE, Sea Limited, AI Ambition: Shopee Rides the Compute Supercycle in Southeast Asia Shopee AI Shopping, Malaysia AI Data Centers
Sea operates Shopee, Garena, and SeaMoney across fast-growing markets. In the second quarter of 2025, the company generated $5.3 billion in revenue. Sea is now aligning its growth strategy with practical applications of AI and expanding local compute capacity.
Latest News
On August 1, 2025, Sea signed a memorandum of understanding with OpenAI in Singapore to expand access to advanced AI tools. The first initiative offers Shopee VIP users in Indonesia, Thailand, and Vietnam three months of ChatGPT Plus beginning August 8. The program functions as a subscription referral offer, integrating into Shopee’s loyalty system and OpenAI’s paid customer funnel.
This partnership is significant because it embeds frontier AI models into retail operations, where conversion rates, advertising yields, and service costs directly impact profitability. The announcement coincides with OpenAI’s collaboration with Broadcom to develop custom AI accelerators slated for deployment in 2026. This roadmap could reduce inference costs in Southeast Asia as regional compute capacity expands.
Recent Earnings
For the second quarter of 2025, which ended on June 30 and was reported on August 12, Sea delivered GAAP revenue of $5.26 billion, a 38.2 percent increase year over year. Adjusted EBITDA reached $829 million. The company reported $2.17 billion in cash and cash equivalents, $7.24 billion in short-term investments, and $2.37 billion in operating cash flow for the first half of the year. Gross merchandise volume grew 25 percent during the same period, maintaining strong commerce momentum.
Revenue exceeded analyst expectations, though EPS missed slightly. Still, investors focused on the accelerating top-line growth.
During the earnings call, CEO Forrest Li noted that Shopee achieved another record quarter and raised Garena’s 2025 bookings growth outlook to more than 30 percent. He also said the team is “testing the boundaries of future game experiences by embracing AI.” Overall, Sea is showing expansion with discipline across commerce, credit, and gaming, supported by rising profitability and solid cash generation.
Analysis and Forward Outlook
Forrest Li’s AI memo to staff on October 21 signaled a strategic shift. He outlined a plan to build a larger, more efficient company by integrating AI across customer service, advertising, fraud detection, logistics, and game development. The partnership with OpenAI provides both access to powerful models and enhanced brand credibility among sellers and VIP shoppers.
If OpenAI’s Broadcom initiative proceeds as planned, inference could become more affordable and localized, which is critical in a region where latency and cost strongly influence user experience and margins. At the same time, capital expenditures are being redirected toward regional infrastructure, with Malaysia emerging as a key site for data center expansion and Singapore resuming controlled allocations under its Green DC Roadmap.
This dual buildout of computing power and renewable capacity strengthens Sea’s ability to develop, test, and deploy AI-driven features rapidly. The main risk remains credit exposure as SeaMoney scales, but the company’s strong balance sheet and cash flow give it the flexibility to refine AI initiatives that enhance conversion rates and reduce support costs.
Conclusion
I remain bullish on Sea’s trajectory. The OpenAI partnership is concrete, the regional compute expansion in Singapore and Malaysia is advancing, and the company’s financial performance demonstrates both growth and cash discipline. If management continues to drive GMV expansion while preserving EBITDA gains, the stock could re-rate higher as AI moves from experimentation to everyday integration.
Bullish outlook
Disclaimer:
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This realy got me thinking. I especially liked how you highlighted that embedding frontier AI models into retail directly impacts profitability. Super insightful!