Windows authentication can be used for SQL Server in AWS RDS instances, if Active Directory is configured using AWS Managed Microsoft AD. For more information, see the AWS documentation.
References:
https://docs.aws.amazon.com/AmazonRDS/latest/UserGuide/USER_SQLServerWinAuth.html
To setup AD authentication for an Amazon RDS Instance, follow the directions in the user guide (below) section labeled "Overview of setting up Windows authentication".
In Terraform -
References:
https://docs.aws.amazon.com/AmazonRDS/latest/UserGuide/USER_SQLServerWinAuth.html
https://registry.terraform.io/providers/hashicorp/aws/latest/docs/resources/db_instance