IBM CEO Arvind Krishna is calling on the U.S. government to increase federal research and development (R&D) funding for AI and related technologies, voicing concern over recent budget cuts that threaten to stall America’s innovation momentum.
“We’ve been an extremely strong advocate — both the company and me personally — that federally funded R&D should be increased,” Krishna said in a recent interview. “That’s our clear and unwavering position.”
Budget Cuts Threaten U.S. AI Leadership
The Biden-era push for innovation through federal investment is being reversed under former President Donald Trump’s new fiscal priorities, which propose severe reductions to AI-focused programs and departments.
One of the hardest-hit agencies is the Directorate for Technology, Innovation and Partnerships (TIP) under the National Science Foundation (NSF). TIP has been a central office for AI research. Now, it faces steep cuts, alongside threats to the jobs of hundreds of scientists at NSF and the National Institute of Standards and Technology.
The Trump administration’s fiscal year 2026 budget calls for slashing more than 50% of NSF funding, eliminating what the administration labels “wasteful” or “woke” spending. These cuts directly impact AI, quantum computing, and advanced semiconductor research — all key fields that rely heavily on public investment.
Additionally, Trump has vowed to dismantle the CHIPS Act, which was passed under President Biden to support domestic semiconductor production, including AI chip manufacturing. The act’s funding office was gutted earlier this year, causing further alarm within the tech community.
Industry Leaders Push Back
Tech organizations such as the Software and Information Industry Association have voiced strong opposition, warning the White House that America’s global AI leadership is at stake. Letters sent to AI czar David Sacks and Commerce Secretary Howard Lutnick emphasize the importance of maintaining robust federal investment.
Research backs their concerns. According to the U.S. Joint Economic Committee, federally funded research produces annual returns of 25% to 40%, outperforming even high-performing venture capital funds.
Krishna echoed this point, stating, “Federal R&D funding is now near historic lows as a percentage of GDP. Increasing that investment has a clear, positive effect on our economy, global competitiveness, and innovation in essential future technologies.”
IBM, though only partially dependent on federal contracts, has already seen fallout from the cuts. In its Q1 2025 earnings report, the company disclosed the cancellation of 15 federal contracts, valued at $100 million. These contracts made up between 5% and 10% of IBM’s consulting operations.
Still, Krishna remains hopeful. “I expect that in a year, federally funded R&D for AI, quantum, and semiconductors will be in as good or better shape than it is today,” he said, underscoring IBM’s long-term commitment to U.S. technological leadership.
