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White House to Redirect Billions in Research Funds Toward AI, Away From Colleges

The overhaul will reshape $200 billion in spending a year and favors individual scientists to outpace China

By Amrith Ramkumar, July 21, 2026 6:00 pm ET, 423

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WASHINGTON—The Trump administration plans to accelerate its overhaul of federal research by supporting more individual scientists and the use of artificial intelligence rather than universities, its latest attempt to accelerate technological discovery to combat China.

In a new report and memo released Tuesday, the White House Office of Science and Technology Policy argues individual scientists can help the nation move faster to use AI in scientific research. The directives from the office will help shape a roughly $200 billion annual federal research and development budget across the government for the rest of President Trump’s second term.

The new guidance could further hurt large universities that rely on federal research funding. The administration hopes to give priority to programs such as fellowships and awards that give opportunities to individuals rather than colleges, it says in the report. Examples of model programs the White House says should be emulated include a prestigious National Science Foundation program for graduate students and a National Institutes of Health award for creative scientists. 

Some universities would also potentially be hampered by a proposed Office of Management and Budget rule that would give political appointees more power over grants and align research with administration priorities.

“Over the last 20 or 30 years we’ve become very stagnant in believing we should keep funding the same research in the same way at the same institutions,” Michael Kratsios, director of the Office of Science and Technology Policy, said in an interview. He met with the leader of an Ivy League university Tuesday about the new approach and got a positive response, he said.

Excessive time spent on bureaucracy at government agencies and universities is another factor holding the U.S. back, the administration has argued. Under its plan, individual researchers at universities would receive funding directly, minimizing the direct involvement of universities. In many cases now, colleges receive funds. 

Another focus is putting AI at the center of scientific research and instituting more aggressive national goals, such as recent pledges to deploy a powerful quantum computer by 2028 and have 10 new large nuclear reactors under construction by 2030 to boost electricity production.

The administration has attempted to bring together the Energy Department’s scientific expertise and supercomputers in a program called the Genesis Mission aimed at using AI to tackle research challenges by joining with the private sector and researchers. 

“Agencies should fund research that uses AI as a new instrument of scientific discovery, not merely as a tool to augment existing capabilities,” Kratsios and OMB Director Russ Vought wrote in their memo about R&D funding priorities. 

Skeptics have cautioned that AI models are prone to mistakes and overemphasizing the technology could restrict the types of studies researchers pursue.

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. Used with citation.

Appeared in the July 22, 2026, print edition as ‘Tech Grants To Shift Away From Universities’.

Amrith Ramkumar is a reporter for The Wall Street Journal in Washington covering tech and crypto policy. He previously covered clean energy and was a Journal markets reporter in New York who wrote about special-purpose acquisition companies, or SPACs, when SPAC mergers were a popular

Source: Exclusive | White House to Redirect Billions in Research Funds Toward AI, Away From Colleges – WSJ