In a recent interview, Arvind Krishna, CEO of IBM, emphasized the critical need for the U.S. government to bolster, rather than diminish, federal funding for artificial intelligence (AI) research and development (R&D). Krishna’s remarks come in response to the Trump administration’s proposed budget cuts targeting scientific research programs, including those dedicated to AI.
Krishna articulated IBM’s firm stance on the matter, stating, We have been an extremely strong advocate — and this is both the company and me personally — on that federally funded R&D should be increased. That’s the position, which is unequivocal, and we strongly believe in that.
The administration’s fiscal year 2026 budget proposal suggests significant reductions in funding for key federal agencies involved in AI research. The Directorate for Technology, Innovation and Partnerships (TIP), a pivotal office within the National Science Foundation (NSF) responsible for AI research, faces steep budget cuts. Additionally, the National Institute of Standards and Technology and the NSF itself are confronting potential staff reductions.
The proposed budget aims to slash over half of the NSF’s funding, targeting what the administration describes as wasteful expenditures. This move jeopardizes billions of dollars allocated to AI R&D projects by the NSF and other federal entities, such as the National Institutes of Health and the Department of Energy, both of which are also facing budgetary constraints.
Furthermore, the administration has indicated intentions to terminate the CHIPS Act, a significant legislative effort from the previous administration designed to enhance domestic semiconductor production, including specialized chips essential for AI applications. The office responsible for administering CHIPS Act funds experienced substantial reductions in early March.
Industry organizations, including the Software and Information Industry Association, have expressed concerns to White House AI advisor David Sacks and Commerce Secretary Howard Lutnick. They warn that these budget cuts could undermine America’s global leadership in AI. According to the U.S. Joint Economic Committee, federally funded research yields annual returns of 25% to 40%, surpassing the 15% to 27% returns achieved by top-quartile venture capital funds.
Krishna highlighted the historical context, noting that current federal R&D funding is near historic lows as a percentage of GDP. He emphasized that increased federal investment in R&D has a profoundly positive impact on the economy, economic growth, U.S. competitiveness, and the advancement of essential future technologies.
IBM has already felt the effects of federal budget reductions. During its Q1 earnings call in April, the company disclosed the cancellation of 15 federal contracts, amounting to significant financial implications.
