Authors: Abhivardhan and Genevieve Donnellon-May
The recent Trump administration memorandums (M-25-21 and M-25-22) highlight a strategic continuity in US artificial intelligence (AI) policy, one that extends beyond regulatory measures to encompass intellectual property protection, cloud infrastructure dominance, and technological sovereignty. This evolving policy framework signals a deepening competition with China—one that moves beyond high-profile battles over large language models (LLMs) or semiconductor controls to a broader, multi-dimensional rivalry.
This competition reflects fundamentally different AI ecosystems: America’s Platform-as-a-Service (PaaS)-dominated landscape versus China’s Infrastructure-as-a-Service (IaaS)-focused approach. US firms such as AWS, Azure and Google Cloud generate roughly equal revenues from both PaaS and IaaS, while Chinese providers, including Huawei and major state-owned telecommunications enterprises, derive a significantly larger share from infrastructure services. This structural divergence mirrors broader AI development philosophies—America’s emphasis on software-first, scalable platforms, compared to China’s focus on hardware-driven computing capacity.
For Indo-Pacific nations and the Quad grouping, the continuation of US AI policies creates complex strategic navigation challenges. Democratic allies must now consider how to position themselves between two divergent models: America’s intellectual property-driven, innovation-focused ecosystem and China’s infrastructure-heavy, efficiency-oriented approach. The dilemma is not merely technical but deeply geopolitical. Access to advanced AI capabilities increasingly comes with implicit alignment to broader governance models, supply chain dependencies, and standards-setting efforts. The stakes could not be higher, as regional powers strive to safeguard their technological sovereignty while maintaining flexibility amid intensifying great-power competition.
Unpacking Trump’s AI Policy Continuations
Trump’s memorandums maintain the previous administration’s firm stance on intellectual property (IP) protection, but with a sharper edge. Unlike the Biden administration’s regulatory focus, Trump’s framework explicitly rejects tech industry calls for weaker IP protections in the context of AI training, particularly regarding the use of copyrighted materials. Memorandum M-25-22 requires mandates that federal agencies “ensure contracts permanently prohibit the use of non-public inputted agency data and outputted results to further train publicly or commercially available AI algorithms… absent explicit agency consent.” This clause signals a stricter, more defensive posture toward safeguarding sensitive data within the broader competition over AI capabilities.
This hardline stance on intellectual property is coupled with a strong “American-Made AI” preference. The administration states that “it is the policy of the United States to buy American and to maximize the use of AI products and services that are developed and produced in the United States.” Together, these policy continuations signal a renewed commitment to maintaining American technological leadership while protecting IP rights—areas where Indo-Pacific nations must carefully calibrate their own strategies to balance innovation, sovereignty, and access to global technologies.
The Cloud Infrastructure Divide: Strategic Implications
The divergent cloud infrastructure models between the United States and China are creating distinct strategic landscapes for Quad members. The US leads in Platform-as-a-Service (PaaS), offering advanced, integrated platforms that bundle AI services atop sophisticated cloud infrastructure. In contrast, China dominates in Infrastructure-as-a-Service (IaaS), prioritizing physical computing capacity and large-scale data infrastructure over advanced service layers. This structural difference helps explain why US AI tends to be software-first—designed to plug seamlessly into scalable PaaS ecosystems—while Chinese AI often adopts a hardware- and robotics-first approach, built atop massive IaaS foundations.
As global spending on IaaS and PaaS is projected to grow by 24.2% in 2025, Indo-Pacific nations face critical strategic choices: whether to align with the US model of modular, innovation-driven platforms, the Chinese model of sovereign, infrastructure-based systems, or attempt to straddle both. These decisions will not merely shape technology adoption but also influence digital sovereignty, supply chain resilience, and regulatory autonomy.
China’s “Eastern Data Western Computing” initiative, which coordinates major data centers with renewable energy infrastructure in inland provinces, further strengthens its IaaS ecosystem. By reducing operational costs and promoting sustainable digital growth, this model could become increasingly attractive to developing nations seeking affordable and resilient AI capacity. Moreover, China’s leadership in high-impact AI research—accounting for 36.5% of global output compared to America’s 15.4%—bolsters its ability to offer not only infrastructure but also cutting-edge AI applications, potentially reshaping regional technological dependencies.
Quad Positioning: Balancing Autonomy and Alignment
For the Quad, Trump’s AI policies demand strategic recalibration. Under the previous administration, the Quad developed initiatives like the and focused on promoting ethical AI governance. Now, with Trump’s anti-regulatory approach, Quad members face pressure to choose between deregulation and maintaining stronger governance frameworks.
For the Quad, the Trump administration’s AI policies demand a significant strategic recalibration. Under the previous administration, the Quad worked to foster cooperative initiatives such as the “Critical & Emerging Technology Forum” and “AI-ENGAGE”, which focused on ethical AI governance and addressing the global implications of AI development. These initiatives were designed to align the Quad countries around shared principles of transparency, fairness, and human rights in AI development. Now, with the Trump administration’s more aggressive stance on AI, which includes an anti-regulatory approach and a preference for unbridled innovation, Quad members face the dilemma of choosing between deregulation and the continuation of stronger, governance-centric frameworks.
Vice President Vance’s recent messaging of a “free-for-all AI” and vocal opposition to “tightening the screws on US tech companies” suggests a waning American appetite for coordinated, multilateral regulation. This presents the Quad with a unique challenge: how to align with American policy while still maintaining commitments to responsible AI governance. In practical terms, this creates a three-way tension between American deregulation, European rights-based regulatory frameworks, and China’s state-driven, top-down model of AI control.
The Quad’s ability to navigate this triadic tension will have significant implications not only for the region’s technological trajectory but also for its broader geopolitical alignment. Countries in the alliance must decide whether to follow the US lead in deregulation, adopt European-style frameworks focused on individual rights, or consider elements of China’s centralized, infrastructural model. The consequences of this decision extend beyond regulatory concerns, touching on issues of economic competitiveness, digital sovereignty, and national security. For Indo-Pacific nations, the challenge is further complicated by the region’s varying levels of technological development and the increasing influence of Chinese-led technological ecosystems, which promise both economic opportunity and the potential for geopolitical entanglement.
India’s Critical Position
India occupies a pivotal position in the evolving global AI landscape. As both a Quad member and an emerging technology power, India must navigate the complex and often competing visions for AI governance while safeguarding its technological sovereignty. India’s unique position is shaped by its rapid technological advancements, its growing AI capabilities, and its commitment to strengthening its own intellectual property (IP) framework, all of which make its role in the Quad even more crucial.
The challenge for India is twofold. On one hand, it must engage in Quad-led technology initiatives that aim to foster ethical AI development and promote transparent governance. On the other hand, India faces increasing pressure to “maintain a delicate balance with China” — its largest trading partner and a key player in AI research and development. India’s foreign policy, which seeks to preserve autonomy in its regional relations, complicates its alignment with Western-centric frameworks that may be at odds with China’s state-driven model.
In terms of AI governance, India’s domestic preference for strong IP protections aligns well with the Trump administration’s policies, which emphasize the safeguarding of intellectual property rights in AI development. This shared emphasis could open avenues for closer collaboration between India and the US, particularly in joint research and development (R&D) projects, as well as in advancing AI capabilities for defense and national security. At the same time, India’s robust legal framework on IP protection could be an attractive model for other developing countries in the Indo-Pacific that are wary of falling prey to exploitation by foreign tech giants.
However, India’s desire for autonomy presents a distinct challenge in navigating between US-led deregulation and China’s centralized, state-driven model. India must tread carefully, balancing the benefits of collaborating with both the US and China while ensuring that its AI sector remains open, competitive, and free from undue foreign influence. As India’s digital economy continues to expand, its strategic choices in AI governance will not only shape its own technological future but also play a significant role in determining the broader regional order in the Indo-Pacific.
Conclusion
Indo-Pacific nations, and Quad members in particular, must seek to harmonize IP frameworks while maintaining the flexibility needed to foster domestic innovation. This delicate balance will be essential for ensuring that regional technological development is not stifled by overly restrictive regulations, yet is still protected from intellectual property theft or exploitation. In parallel, these countries should aim to develop cloud infrastructure that strikes a balance between the US’s advanced software capabilities and the physical resilience offered by China’s infrastructure-first model. By doing so, they can create more sustainable and adaptable systems that support not only national technological sovereignty but also regional collaboration.
Moreover, the Quad nations must prioritize securing their supply chains across democratic nations, reducing dependencies on potentially unreliable or authoritarian-controlled sources. This will not only ensure the resilience of critical technological infrastructure but also strengthen collective security in the face of growing geopolitical tensions. Additionally, establishing data-sharing mechanisms that are governed by clear sovereignty protections will be crucial in fostering trust between nations while respecting their national interests and security concerns.
For India specifically, leveraging its robust IP framework while carefully balancing its relationships with both the US and China will be crucial. India’s position as a rising technology power means it must navigate the US-China AI competition carefully, especially as both countries’ divergent approaches to cloud infrastructure and IP governance continue to define the global AI landscape. India’s role in shaping the regional order will depend on its ability to strategically position itself between these two superpowers, drawing from both their strengths while preserving its own technological autonomy.
Ultimately, the success of Indo-Pacific nations in navigating these complex challenges will determine their ability to shape the future of AI governance, ensuring that their technological progress remains aligned with their broader strategic interests in a rapidly changing global environment.
