The U.S. government has pulled out a $200 million (about 290 billion won) "subsidies card" to drive Chinese smartphones out of the Indo-Pacific. It is part of the so-called "Pax Silica" war with China over artificial intelligence (AI) hegemony, going beyond simple economic support.
On the 19th (local time), the U.S. State Department released the "Edge AI package," which centers on supporting the distribution of low-cost, high-performance smartphones in Indo-Pacific countries that run U.S. operating systems (OS) such as Android or iOS. The State Department said it would enable "1 billion next-generation internet users in the Indo-Pacific to be integrated into an open, interoperable, and innovative software ecosystem."
The U.S. State Department did not directly mention whom the initiative targets. However, analysts say the backdrop for such an extraordinary injection of funds is the steep growth of Chinese smartphones. According to market research firm Omdia, the overseas market share of Chinese brands surged from 11% in 2013 to 52% in the first half of 2025, seizing more than half the market.
Jacob Helberg, U.S. State Department undersecretary for economic affairs, said in an interview with CNBC that "China is recouping research and development expense through its massive domestic market of 1.4 billion people, then dumping low-cost hardware in overseas markets." Helberg emphasized that this initiative is a key measure to offset China's abnormal price advantage and to secure a reliable supply chain.
There is also speculation that Samsung Electronics could benefit as a byproduct of the initiative. The U.S. State Department specified that priority for funding goes to corporations from partner countries in "Pax Silica," the U.S.-led AI supply chain alliance. Excluding Apple, Samsung Electronics is effectively the only manufacturer that meets this condition and can compete with Chinese brands.
The project goes beyond simply distributing handsets and aligns with the United States' broader plan to build an "AI bulwark" spanning critical minerals, energy, and semiconductors. The State Department plans to accept proposals from smartphone manufacturers and telecom carriers over the next 90 days, then disburse the final funds after notifying the U.S. Congress.