By Zarak Khan | 2026-02-27

The United States' decision to subsidize companies deploying low-cost smartphones powered by American software across the Indo-Pacific is being viewed by analysts and officials as part of a broader strategy to curb China's expanding influence over regional digital infrastructure and reduce exposure to coercive technology practices.

Washington's concerns include China's ability to shut down vital technology during crises and to steal data from phones running its software.

On February 19, the US Department of State announced the Edge AI Package, a competitive funding program that will allocate up to $200 million in foreign assistance to "support programs accelerating the deployment of secure, high-quality, and affordable smartphones across the Indo-Pacific region." AI stands for artificial intelligence.

Eligible devices must operate on "trusted" American mobile operating systems, including Android or iOS, the department said.

US officials framed the requirement as a safeguard designed to ensure that the next billion internet users in the Indo-Pacific are "integrated into an open, interoperable, and innovation-forward software ecosystem."

The initiative will provide "a market-based alternative to high-risk vendors" in the Indo-Pacific region, the statement said without identifying specific companies.

However, the reference was widely seen as directed at Chinese technology firms such as Huawei, Xiaomi and OPPO, South Korea's Chosun Daily reported February 23.

Pax Silica

The Edge AI Package forms part of the broader US-led Pax Silica initiative, a strategic technology framework Washington says is designed to "reduce coercive dependencies, protect the materials and capabilities foundational to artificial intelligence, and ensure aligned nations can develop and deploy transformative technologies at scale."

Under the Edge AI Package, priority will go to smartphone original equipment manufacturers headquartered in countries that have signed the Pax Silica agreement, the State Department said.

Launched in December during an inaugural summit in Washington, DC, Pax Silica is meant to build what officials describe as "a secure, prosperous, and innovation driven silicon supply chain," ranging from critical minerals and energy inputs to advanced manufacturing, semiconductors, AI infrastructure, and logistics.

The alliance includes Japan, South Korea, Singapore, Israel, the United Arab Emirates, the United Kingdom, Australia and Qatar, alongside technology partners such as the Netherlands and Taiwan. India joined the initiative on February 20.

Supply chain pact

Washington has increasingly framed technology supply chains, particularly for smartphones, semiconductors, AI and critical minerals, as central to national and economic security.

The Edge AI Package could directly impact Chinese smartphone manufacturers, including Huawei, Xiaomi, Oppo and Vivo, in emerging Indo-Pacific markets, Lizzi C. Lee, a fellow at the Asia Society Policy Institute's Center for China Analysis, said recently.

However, the initiative's impact remains uncertain, she said.

"The open question is whether these subsidized alternatives can realistically match the pricing, scale and rapid innovation that Chinese brands currently deliver," she told the South China Morning Post on February 20.

Broader framework

Against this backdrop, Pax Silica is meant to diversify production networks by connecting trusted partners across the technology ecosystem.

The United States has expanded technology cooperation with India, a country with growing industrial capacity in consumer electronics. On February 20, Washington and New Delhi issued a joint declaration, pledging to "test, deploy, and scale rapidly" secure and trusted AI ecosystems.

The two countries are rejecting "weaponized dependency" and blackmail and frame economic security as integral to national security, Jacob Helberg, the US under secretary of state for economic affairs, said on the sidelines of the India AI Impact Summit in New Delhi.

Greater India–US coordination in silicon supply chains and in AI computing infrastructure could reshape Asia's geopolitical landscape, the Institute of South Asian Studies at the National University of Singapore said in a February 23 commentary.