IBM CEO Arvind Krishna isn’t holding back when it comes to the future of U.S. innovation. Amid sweeping budget cuts by the Trump administration, Krishna is calling for a significant boost—not a rollback—in federal AI R&D funding. For Krishna, the stakes are too high to ignore.
Speaking candidly in a recent interview, Krishna emphasized that both he and IBM have consistently backed more robust public investment in emerging technologies. “We’ve been strong advocates—this is both the company and me personally—of increasing federally funded R&D,” he said, doubling down on IBM’s long-standing position.
But that vision is currently at odds with the Trump administration’s proposed 2026 budget. In a sharp pivot from previous administrations, the White House is seeking to gut funding for science and tech programs. The National Science Foundation (NSF), including its Directorate for Technology, Innovation and Partnerships (TIP)—a key driver of federal AI research—is facing potentially devastating cuts. Entire teams at TIP and the National Institute of Standards and Technology are being downsized.
The situation gets even more dire with threats to eliminate the CHIPS Act. Passed during the Biden era, the law was a landmark push to revive domestic semiconductor manufacturing, including chips tailored for AI workloads. But earlier this year, the office in charge of managing CHIPS Act funds was gutted.
For tech companies like IBM, the ripple effects are already being felt. On its recent Q1 earnings call, IBM disclosed the cancellation of 15 federal contracts, resulting in a projected $100 million loss in future revenue. These contracts, while representing just under 10% of IBM’s consulting division, underscore how closely tied America’s tech ecosystem is to federal R&D pipelines.
Industry groups are now sounding the alarm. Organizations like the Software and Information Industry Association have penned urgent letters to AI czar David Sacks and Commerce Secretary Howard Lutnick. Their message is clear: cutting federal AI R&D funding could hand over global leadership in artificial intelligence to other nations.
There’s strong economic evidence behind these concerns. According to the U.S. Joint Economic Committee, federal R&D delivers annual returns of 25% to 40%—even outperforming top venture capital firms. In other words, public investment in science pays off.
Krishna sees that too. “Federal R&D right now is near historic lows as a share of GDP,” he noted. “More investment here doesn’t just fuel technology—it boosts economic growth, global competitiveness, and innovation in critical areas like AI, quantum computing, and semiconductors.”
Despite recent setbacks, Krishna remains hopeful. He predicts a rebound in federal support within the next year. “I’m optimistic,” he said. “I believe we’ll see AI, quantum, and semiconductor R&D in as good—or better—shape than today.”
His words carry weight, not just because IBM is a tech giant, but because the U.S. faces a turning point. As other countries double down on AI research, the question remains: will America fall behind, or will it invest in its own future?
