Hello and welcome to Eye on AI! In this edition...Meta pilots AI business agents; Anthropic raises a fresh $3.5 billion at $61.5 valuation; huge bank loans for AI data centers; a new vision model from Cohere's nonprofit arm.
Last week, I met with Kyunghyun Cho, a prominent AI researcher and professor of computer and data science at New York University. Cho is highly regarded for his work that led to the development of the Transformer architecture, which serves as the foundation of OpenAI’s ChatGPT. He is also well-known for his research into the use of AI in health care, including improving breast cancer screenings.
At Cho’s Manhattan office, just one floor above that of Meta chief scientist and NYU professor Yann LeCun, we discussed a topic that LeCun and other AI leaders have been speaking out on: how proposed budget cuts and recent layoffs at the National Institutes of Health (NIH) and National Science Foundation (NSF) will impact the future of academic research in AI. “The U.S. seems set on destroying its public research funding system,” LeCun posted on LinkedIn last week, pointing out that “many U.S.-based scientists are looking for a Plan B.”
While an executive order by President Trump in January saying U.S. policy is to “sustain and enhance America’s global AI dominance,” Cho said AI research will be hurt by the Trump administration’s move to cut billions of dollars in funding from the NSF and NIH by putting an immediate cap on so-called “indirect costs,” which include infrastructure, facility maintenance, and staff salaries. In response, 22 state attorneys general filed a lawsuit challenging the policy, resulting in a temporary restraining order that blocks the NIH from implementing the cap in those states pending further hearings.
Two University of Chicago professors, Rebecca Willett and Henry Hoffmann, wrote last week that “America’s leadership in the global AI and computing ecosystem is at risk; competitors are quickly gaining ground as they aggressively ramp up government-funded research programs.”
Cho said the funding cuts will “impact everything that is being done at universities, hospitals, or any kind of nonprofit research organization,” pointing out that AI research will not get any special carve-out. Instead, the costs of research infrastructure supports the entire university research ecosystem. Even non-federal research grants, such as from private foundations or tech companies, will be impacted since they often follow the same rate of reimbursing indirect costs as federal grants, he added.
For Cho’s PhD students and postdoctoral researchers, their salaries are also on the line. Universities often pay a small percentage of academic researcher salaries—sometimes only 5-10%. The remaining salary is covered by research grants—primarily from federal agencies like the NSF and NIH, which are now facing major funding cuts.
This may well lead to even more PhDs abandoning academia for industry roles, he said, at a time when more are needed to work in essential AI research areas like health care.
“It’s definitely going to discourage people,” Cho said. “We need a lot of people to work on [AI in health care], particularly in hospitals, because that’s where the actual action is and where you want to be in order to know what kinds of problems need to be solved.”
Of course, attracting and retaining AI researchers for socially impactful areas like health care, climate science, and fundamental research has been growing more challenging for years. With top AI talent recruited with high six-figure salaries by Big Tech like Google and Meta, and hot startups such as OpenAI and Anthropic, Cho said it's already a battle to keep AI researchers working on the most pressing problems in health care and drug discovery.
When people ask him why the federal government reimburses universities for billions of dollars in indirect costs for research infrastructure, facilities, and salaries, Cho points out that if they didn't, the research might not happen at all.
“The one thing they forget is that universities often don’t have to work on this federally-supported research,” he said. Without the support, he explained, universities might abandon research in favor of simply using tuition to fund teaching students. In a way, the reimbursement of costs to universities is a way to “build up the whole society, to encourage universities and institutes that are not directly tied to revenue or profit to work on these research ideas,” he said.
While Cho said his own research will continue “because it has to,” he emphasized that federally-funded science has worked well overall and should continue. “But there is unfortunately an anti-science sentiment that has gone up to the very top level of the federal government,” he said.
With that, here’s more AI News.
Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman
