Like many technology leaders, IBM CEO Arvind Krishna believes that federal R&D funding for AI and related technologies should be increased, not the other way around.

"We are a very strong advocate - it's both the company and me personally - and should add research and development funded by the federal government," Koshner said in an interview with TechCrunch. "That's the clear position, and we believe in that."

President Donald Trump and his cabinet attempted to make in-depth cuts to federal grants and scientific research programs in search of prior focus compared to previous administrations.

In recent weeks, the critical offices of federal AI research, the Bureau of Technology, Innovation and Partnerships (TIP), have faced a drastic reduction in attacks. Meanwhile, dozens of employees at the National Institute of Standards and Technology, as well as the National Science Foundation (NSF), found themselves in the chopping block.

In the proposed budget for fiscal 2026, the Trump administration called on Congress to cut more than half of NSF funds, eliminating what it described as wasted and "wake up" spending. The NSF and other federal agencies, such as the National Institutes of Health and the Department of Energy, have awarded billions of dollars in AI R&D programs, which is at risk.

Trump also threatened to end the "Bargar Chip Act", a major Biden administration law that attempted to promote domestic semiconductor production in the United States, including specialized bargaining chip production for AI. The offices that manage chip bill funds were mostly phased out in early March.

Technology industry groups, including the Software and Information Industry Association, have sent letters to White House AI "tsar" David Sacks and Commerce Secretary Howard Lutnick, warning that the reduction could give the U.S. global leadership in AI. Federally funded studies generate annual yields of 25-40%, compared to the 15-27% return received by a quarter of VC funds, according to data from the United Economic Commission.

"We believe (Federal R&D funding) is currently occurring at historic lows in GDP percentage, and more federally funded R&D has had a huge positive impact on economic growth, competitiveness in the US athletics, and investment in many of our technologies in the future."

IBM is directly affected by federal cuts. The company revealed on a first-quarter earnings call in April that its 15 federal contracts were cancelled, totaling $100 million in future payments. Federal contracts account for less than 5% to 10% of IBM's consulting business.

Krishna was quick to point out that federal funds accounted for only a small part of IBM's overall business, saying he was "optimistic" and that the government would increase R&D spending within a year.

"I will tell you, I hope that in a year (…) year (…) for research and development funds for AI, quantum and semiconductors, I hope it will be in a better or better condition than it is today," Krishna said.