Like many Tech leaders, IBM CEO Arvind Krishna believes that federal R&D funding for AI and related technologies should be increased.
“We are a very strong advocate, and this is both the company and myself, and we should increase the research and development that we have personally funded,” Krishna said in an interview with TechCrunch. “That’s a clear position and we strongly believe in it.”
President Donald Trump and his cabinet tried to cut deep into federal grants and scientific research programs to pursue priorities far differently from previous administrations.
Over the past few weeks, the Office of Technology, Innovation and Partnerships (TIP), the leading federal office for AI research, has been hit by a rapid budget cut. Meanwhile, many staff members of the National Institute of Standards and Technology (NSF) that house the chips have found themselves in the chopping block.
In its 2026 budget proposal, the Trump administration is asking Congress to significantly cut more than half of the NSF funds, eliminating what it describes as vain and “wake” spending. At risk, billions of dollars awarded to AI R&D projects by the NSF and other federal agencies face cuts, including the National Institutes of Health and the Department of Energy.
Trump has also threatened to end the Chips Act, a major Biden-controlled-era law that sought to boost domestic semiconductor production in the United States, including the production of specialized AI chips. The office responsible for managing the Chips Act fund was largely broken in early March.
A high-tech industry group, including the Software and Information Industry Association, has sent a letter to White House AI “Emperor” David Sachs and Commerce Secretary Howard Rutnick. According to the United States Joint Economic Committee, federally funded studies have annual revenues of 25% to 40%, comparing favorably with 15% to 27% returns achieved by the highest quartile VC fund.
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“We believe (federal R&D funding) is happening near a historic low in GDP percentage,” Krishna told TechCrunch.
IBM is directly affected by federal cuts. During a first quarter revenue call in April, the company revealed that 15 federal contracts were cancelled, worth $100 million in future payments. Federal contracts are just under 5% to 10% of IBM’s consulting practices.
Realizing that federal funding constitutes only a small part of IBM’s overall business, Krishna said the government is “optimistic” to increase R&D spending within a year.
“We expect in a year, we will see that the Federal R&D, Quantum and Semiconductors R&D for AI will be better or better than today,” Krishna said.