IBM CEO Arvind Krishna has urged the Trump administration to increase federal funding for artificial intelligence (AI) research and development. He expressed concern about proposed budget cuts that could limit technological progress and harm the economy.
Krishna emphasized the critical role of government investment in maintaining U.S. global leadership in AI. He warned that current federal research funding is near historic lows as a percentage of GDP.
Concerns Over Federal AI Funding Cuts
The Trump administration has proposed significant reductions to federal science programs. This includes more than a 50% cut to the National Science Foundation’s (NSF) budget. Such cuts threaten billions of dollars allocated to AI R&D by agencies like the NSF and the Department of Energy. These cuts have already led to layoffs at the National Institute of Standards and Technology and the NSF.
The federal office overseeing AI research, the Directorate for Technology, Innovation, and Partnerships, has faced steep budget reductions.
The administration also threatens the CHIPS Act program, essential for boosting domestic semiconductor production and specialized AI chips. The office managing CHIPS Act funds was largely gutted earlier this year.
Industry groups have warned that these funding reductions could undermine America’s leadership in AI technology.
Economic and Innovation Impact
Krishna stressed increasing federally funded R&D is vital for economic growth and competitiveness. According to the U.S. Joint Economic Committee, federally funded research yields annual returns between 25-40%. These returns exceed those of top venture capital funds, which average 15-27%.
The Trump administration justifies cuts under broader government spending reductions. However, these moves have disrupted ongoing AI projects and frozen new funding. For fiscal year 2026, the administration seeks to slash over half of NSF funding, citing wasteful spending.
IBM itself has lost $100 million due to federal contract cancellations. Despite this, Krishna remains optimistic about future federal R&D spending for AI and quantum technologies. He expects funding levels to improve within a year.
Industry and Academic Responses
- Major universities have filed lawsuits to block the NSF budget cuts.
- Tech industry groups have sent urgent letters to White House advisors about AI funding.
- Concerns continue that cuts will slow crucial innovation and diminish U.S. competitiveness globally.
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