appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Xinmei Shen

The US State Department will subsidise companies to roll out cheap smartphones running American software in the Indo-Pacific region, part of its “Pax Silica” initiative that seeks to shore up the resilience of the US artificial intelligence supply chain and win the AI race with China.
The US has launched the Edge AI Package, which provides up to US$200 million of funding for mobile network operators and smartphone vendors to deploy “low-cost, high-performance” handsets in some partner nations in the Indo-Pacific, the Department of State said on Thursday.
These smartphones should run on “trusted” American mobile operating systems (OS), such as Android and iOS, and fully support the US software and AI ecosystem, the State Department said.
Companies interested in joining the programme should use US funding to lower the retail price of their handsets in Indo-Pacific countries “to a competitive level with untrusted market incumbents”, it said.
The initiative would “ensure that the digital infrastructure of our partners remains secure, autonomous, and free from coercion”, according to the State Department.


“This programme is going to make millions of smartphones more competitive vis-a-vis subsidised, low-cost competitors,” Jacob Helberg, the State Department’s Under Secretary for Economic Affairs, said in a CNBC interview on Thursday.
“And ultimately, what that means is that it’s going to help promote connectivity and opportunity for the recipients, while also promoting the American OS and application ecosystem,” he said.
While the Edge AI Package did not explicitly name China, the programme came amid an intensifying artificial intelligence race with China and as the US ramps up its efforts to reduce supply chain vulnerabilities.
Concerns over China’s dominance in critical minerals have heightened after Beijing restricted rare-earth exports to the US last year in response to Washington’s trade curbs.
The Pax Silica initiative, launched in December, aimed to build a US-led technology ecosystem spanning critical minerals, energy, semiconductors and other AI infrastructure that’s secure from “coercive dependencies”.
Participating countries include Australia, Greece, Israel, Japan, Qatar, South Korea, Singapore, the United Arab Emirates and Britain, with non-signatory participants including Canada, the European Union, the Netherlands, Taiwan and the Organisation for Economic Cooperation and Development.
Helberg said on Wednesday that India has joined the framework.
“China has 1.4 billion internal users that allow its own champions like Huawei and [Semiconductor Manufacturing International Corporation] to amortise those [research and development] costs across a massive domestic base before they even export a single unit,” Helberg said. “And so ultimately, that gives them a built-in cost advantage due to pure economies of scale, allowing them to dump a lot of underpriced hardware.”
Partnering with India, the only nation that surpasses China’s demographic scale, helps offset China’s price advantage, he said, but added that Pax Silica is “not really about China”, but about securing US supply chains.
Chinese smartphone brands have aggressively expanded their overseas footprints as the domestic market has matured. By the first half of 2025, Chinese vendors had captured 52 per cent of the overseas market, increasing from just 11 per cent in 2013, research firm Omdia said in October.
The companies most likely to feel pressure from the US Edge AI Package include Huawei, Xiaomi, Oppo and Vivo, which dominate affordable smartphone segments across parts of Asia, said Lizzi Lee, Fellow on Chinese Economy at the Asia Society Policy Institute’s Centre for China Analysis.
But whether the initiative will successfully challenge Chinese vendors’ momentum remains to be seen, according to Lee.
“Still, the open question is whether these subsidised alternatives can realistically match the pricing, scale and rapid innovation that Chinese brands currently deliver,” she said.


Xi ends 3-day Trump visit with promise to meet again in November in China

The Chinese roots of ‘gung-ho’ as Trump and Xi look to shared history

AI war, Taiwan and translation: SCMP answers your questions from Xi-Trump summit

Inside Melania Trump and Peng Liyuan’s visit to the Smithsonian’s Peacock Room

US-China trade war

Washington offers US$200 million to boost American smartphone industry in Indo-Pacific

Jacob Helberg, the State Department’s Under Secretary for Economic Affairs, believed the US$200 million in government funding would make “millions of smartphones more competitive”. Photo: Getty Images

How China’s research prowess will shape course of 21st century

Gong Xianzu, head of division of the Experimental Advanced Superconducting Tokamak Physics and Experimental Operations, observes data during an experiment in Hefei, Anhui province, on January 19, 2025. Photo: Xinhua

Researchers position an alloy material sample used in building a thorium molten salt reactor at a lab in Shanghai on October 23, 2025. Photo: EPA / Xinhua

Does Trump’s retreat on electric vehicle policy risk ceding ground to China?

The BYD Explorer vessel docks at Yantai port in eastern China’s Shandong province as it awaits the loading of Chinese electric vehicles for export overseas. Photo: AFP

US President Donald Trump announced plans in December to lower fuel-efficiency standards for cars, a move he said would make vehicles more affordable for Americans. Photo: AP

BYD launches the Titanium 3 electric SUV under its Fang Cheng Bao brand in Shenzhen on April 16, 2025. Photo: Handout

A worker checks the frame of a car on a production line under Geely Auto’s Zeekr brand in Ningbo. Chinese brands like Geely have gone global, but they are almost non-existent in the US. Photo: Getty Images

A Tesla Cybercab is tested on South Lamar Boulevard in Austin, Texas, last month. Photo: Austin American-Statesman via AP

US offers more details on claim China conducted secret nuclear weapons test

An unarmed Minuteman III intercontinental ballistic missile launches during a developmental test at Vandenberg Air Force Base, California, on February 5. A State Department official has confirmed the US will resume nuclear testing.  Photo: AFP

Could the US unlock China’s rare earths grip with AI and quantum computing?

China controls most of the world’s rare earth mining and nearly 90 per cent of all processing and refining capacity. Photo: Reuters

Technical advances alone will not be enough to offset China’s structural advantages, according to one analyst. Photo: Reuters

Workers in the rare earth industry face serious health risks related to chronic exposure to toxic dust. Photo: Reuters

US President Donald Trump hosts the signing of a peace deal with Rwandan President Paul Kagame (left) and DR Congo’s President Felix Tshisekedi at the United States Institute of Peace in Washington on December 4. As part of the deal, the US was promised access to critical minerals in eastern Congo. Photo: AFP

News

Economy, Trade & Business

Diplomacy

China

State Department subsidies for US companies to shore up US artificial intelligence supply chain in region and counter China’s dominance


State Department subsidies for US companies to shore up US artificial intelligence supply chain in region and counter China’s dominance.


Washington offers US$200 million to boost American smartphone industry in Indo-Pacific

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}State Department subsidies for US companies to shore up US artificial intelligence supply chain in region and counter China’s dominance

State Department subsidies for US companies to shore up US artificial intelligence supply chain in region and counter China’s dominance