We applaud Arvind Krishna, the new CEO of IBM, for taking a principled stand against federal proposed cuts to budget. We encourage Mr. Peters to continue calling on the Trump Administration to increase investment in artificial intelligence (AI) R&D. And yet President Donald Trump and his cabinet have called for unprecedented cuts to scientific research programs. These cuts will cripple fundamental federal offices, and not just the National Science Foundation, but the Directorate for Technology, Innovation, and Partnerships (TIP).
The TIP office, crucial for AI research, has faced steep budget reductions that threaten America’s competitiveness in the AI sector. The Trump administration recently proposed a radical budget for fiscal year 2026 that would eliminate over half of the National Science Foundation’s (NSF) budget. They decry this funding as wasteful, out-of-control spending. This short-sighted move would seriously undermine progress toward the development of these technologies that are critical to our nation’s future.
Likewise, IBM puts the number of federal contracts terminated by them in the last year at 15. This move will save the company an estimated $100 million in future payouts. Federal contracts account for 5-10% of IBM’s consulting practice. Consequently, the company stands to lose significant revenue as a result of these cuts. Krishna had challenged the extent of these reductions’ far-reaching effects. He cautioned that billions more could be endangered by threats to federal funding for AI and IT research.
Even with these challenges, Krishna is optimistic about future funding levels. He was quick to note that federal funding is just a sliver of IBM’s total business. It’s important as a force for innovation and as an economic engine in its own right.
“I expect that in a year […] federally funded R&D for AI, for quantum, for semiconductors — I expect it to be in as good or in a better shape than it is today.” – Arvind Krishna
Krishna highlighted the importance of federally funded R&D, arguing that it currently occurs at historic lows relative to the nation’s GDP. He hopes that greater federal investment in R&D will produce breakthroughs that lead to strong, sustainable economic growth and improve the United States’ competitiveness on the global stage.
“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,” Krishna stated. He stated specifically that smart investments in these critical enabling technologies will do the most for our economy and national security.
While the proposed budget cuts would be devastating overall, they represent a shocking break from even the last two administrations’ priorities. The Trump administration has periodically threatened to kill the CHIPS Act. This landmark legislation, passed by the Biden administration, focuses on increasing domestic semiconductor production. The office tasked with administering CHIPS Act funds was mostly abolished just this past March.