Administration Advances New Model for Federal Research

The White House Office of Science and Technology Policy (OSTP) issued a report proposing significant restructuring of the Administration’s approach toward support for Federal research. Alongside other efforts, the report brings to the fore implications for how priorities are set, funding is awarded, and how businesses participate in publicly supported research iniativies. 

• OSTP’s Science: A New Golden Age proposes reorganizing the roughly $200 billion annual Federal R&D portfolio around national missions, individual researchers, alternative award models, and AI-enabled science. 
• The proposal would broaden participation through joint university-industry-Federal research centers, startups, consortia, independent researchers, and new research organizations. Agencies must translate the recommendations into future budgets, funding opportunities, pilot programs, and award rules.
• The following day, the Administration announced more than $5 billion in commitments to expand the Genesis Mission, an AI-for-science initiative involving over 15 agencies. The total combines research awards and future funding opportunities with Federal datasets, computing capacity, laboratories, and other research assets rather than representing a single pool of new grant funding.
• For business, the framework could expand access to Federal funding, infrastructure, talent, and commercialization partnerships. Its effects will depend on program design, intellectual property terms, funding stability, access for smaller firms, and continued support for university research and training. 

Changing the Federal Research Model

Traditionally, the Federal government funds basic and mission-oriented research; universities, Federal laboratories, businesses, and nonprofit institutes perform it; and companies commercialize many resulting discoveries. OSTP argues that this system has become slow, administratively burdensome, and concentrated in established institutions. Its proposed framework would change how agencies set priorities, award funding, and determine who participates while preserving a Federal role in research that private markets may not support.¹ In accordance with the report, a joint memorandum from OSTP and the Office of Management and Budget (OMB) directs agencies to incorporate these priorities into their fiscal year 2028 budget submissions; larger research agencies are required to submit implementation plans.²

How Federal Research Funding Currently Works

In 2023, the Federal government funded about $142 billion in research and development performed by agencies, universities, businesses, and other organizations.³ Congress appropriates research funding to agencies, which conduct some work internally and distribute the remainder through grants, contracts, and cooperative agreements. Federal agencies and Federally-funded research and development centers performed approximately $61 billion of this research, universities performed $44 billion, and businesses performed $27 billion.

For competitive grants, an agency publishes a funding opportunity, and applicants submit research plans, budgets, and supporting materials. Independent scientific or technical experts generally evaluate the proposals under confidentiality and conflict-of-interest rules. Agency officials then select projects based on those reviews, program priorities, available funding, and applicable legal requirements. A principal investigator typically leads each research project. The investigator develops the proposal, directs the work, oversees the budget, and fulfills the award’s scientific and reporting requirements. The investigator usually applies through a university, company, hospital, or other research institution, which submits the application, receives and administers the award, and supports compliance with Federal requirements.

Federal awards can cover both direct and indirect research costs. Direct costs include researchers, students, equipment, supplies, and project partners. Indirect costs support shared facilities, utilities, cybersecurity, safety, and grant administration. Universities reported $84.2 billion in direct research costs and $24.5 billion in indirect costs in fiscal year 2023. They also transferred $9.5 billion to outside research partners, extending Federal support to laboratories, hospitals, companies, and subcontractors.⁴ After an agency makes an award, the recipient must document spending, report progress, and comply with financial, legal, and research standards. Agencies retain authority to monitor performance, conduct audits, require corrective action, and, when warranted, suspend or terminate an award.

Broadening the Federal Research Enterprise

OSTP’s report proposes expanding Federal support beyond traditional university-based project grants. It recommends longer-term and portable awards for individual scientists, faster grants, prizes, milestone-based funding, and mechanisms that allow reviewers or program managers to advance promising work without broad agreement from a reviewing panel. Peer review would remain, but agencies would test different selection methods and assess which are likely to produce the strongest results.⁵

These changes would broaden competition while giving agency program managers greater responsibility for selecting projects and managing research portfolios. OSTP presents blind review and support for first-time applicants as ways to reduce the advantages associated with institutional prestige. The report also recommends agency evaluation units to compare funding models, identify gaps and duplication, and assess scientific and technological outcomes.⁶ 

The report also calls for supporting a wider range of organizations, including Advanced Research Projects Agency (ARPA)-style programs, the National Science Foundation’s X-Labs, independent institutes, and temporary nonprofits to address defined scientific or engineering problems. OSTP presents these models as a way to bridge the gap between small university laboratories and large government or commercial programs.⁷ 

Industry would play a larger role through joint university-company centers, independent research organizations, business consortia, and more strategic use of the Small Business Innovation Research and Small Business Technology Transfer programs. The report also recommends broader access to Federal laboratories, computing, equipment, test facilities, and datasets; simpler licensing and research agreements; and cost-shared consortia for technical problems too expensive or risky for one company to solve. It cites SEMATECH and the Extreme Ultraviolet consortium, initiatives launched in the 1980s and 1990s, as precedents.⁸  

Finally, the report supports business-funded doctoral and postdoctoral programs, joint placements, and portable fellowships to increase movement among universities, companies, and Federal laboratories. Taken together, the proposals would expand who can receive Federal support, diversify how projects are selected and managed, and connect research more closely with engineering, commercialization, and production.⁹

Genesis as an Initial Case

The day after OSTP’s report, the White House announced more than $5 billion in Federal commitments to expand the Genesis Mission across more than 15 agencies.¹⁰ Genesis was established by Executive Order in November 2025 as a Department of Energy-led AI-for-science whole-of-government initiative, including health, industrial capacity, scientific discovery, and national security.¹¹ The total combines research awards and future funding opportunities with Federal datasets, computing resources, national laboratories, scientific facilities, and other existing assets; it does not represent $5 billion in new grant funding. 

The initiative is structured as a public-private research partnership. Its shared platform connects Federal supercomputers, scientific data, laboratory equipment, and agency expertise with AI models, software, cloud capacity, and engineering support provided by industry. The Energy Department selections include 278 projects led by 168 universities, 87 national laboratories, 19 companies, and four nonprofit organizations. Across the project teams, 342 institutions are participating, including 157 companies.¹² Selected researchers will receive access to Federal computing and facilities as well as AI tools made available by private-sector partners.

The Department has released a list of some future funding opportunities, including projects related to manufacturing, biotechnology, critical minerals, and other areas. The projects generally require cost sharing: “For-profit entities, whether prime recipients (lead organizations) or subrecipients (team members), are required to provide not less than 20 percent cost share for both basic and applied R&D activities and 50 percent of the total project costs for demonstration and commercial application tasks.”¹³

Genesis puts the OSTP report’s framework into practice by organizing Federal research around national missions, using AI and shared Federal infrastructure, and bringing together agencies, universities, national laboratories, companies, and nonprofits. It applies this model across health, energy, manufacturing, semiconductors, biotechnology, materials science, and national security. Rather than relying only on individual project grants, it combines agency funding, Federal data and facilities, private-sector technology, cost-sharing, and multidisciplinary teams around defined research challenges, including nuclear energy, critical minerals, chip design, fusion, drug discovery, and autonomous laboratories.

Business Impacts: More Access to Funding?

OSTP’s framework could expand business participation beyond conventional contracts and licensing. Companies could serve as research performers, consortium members, technology providers, and commercialization partners while accessing Federal laboratories, datasets, computing, equipment, and test facilities. Some firms may apply directly for support, while others may join university or national-laboratory teams or contribute technology to shared platforms. These opportunities could reduce research costs but generally require cost sharing, technical milestones, and financial reporting and other requirements unique to Federal contracting, potentially favoring experienced Federal recipients.

Public-private projects will require clear intellectual property and data arrangements. Businesses may contribute proprietary models, software, datasets, equipment, or technical knowledge to projects that also use Federal infrastructure and university research. Microsoft has stated that milestones, publications, and intellectual property under its Genesis partnership will be governed by "mutually agreed terms."¹⁴ Similarly, the Association of American Universities has recommended standardized, pre-negotiated agreements, protected publication rights, predictable licensing pathways, and a Genesis-specific intellectual property ombudsman to reduce delays and transaction costs among universities, national laboratories, and companies.¹⁵ 

Businesses should consider the complementary roles of universities, Federal laboratories, and industry as well as potential costs associated with the new framework. The proposed framework continues to recognize universities as sources of foundational research, specialized facilities, startups, and trained scientists while seeking to integrate them more closely with companies and other research organizations. Industry-supported educational programs and technical training could strengthen the workforce and help researchers move among sectors and sponsoring.

It remains unclear how this shift may affect the overall research ecosystem. Some university and research groups support stronger cross-sector training, partnerships, and access to Federal laboratories.¹⁶ Others caution that greater emphasis on industry, individual researchers, and alternative grantmaking could strain universities and academic medical centers if conventional support declines,¹⁷ and in turn risk reducing the longer-term supply talent necessary for future breakthroughs.¹⁸ For business, the strongest model would supplement rather than displace institutions that conduct long-term research and train future workers, combining universities’ strengths in foundational science with industry’s computing, engineering, manufacturing, and commercialization capabilities.

Finally, companies should distinguish among announced commitments, funding opportunities, project selections, and final awards. For instance, the Genesis announcement combines research funding and future competitions; the Department of Energy also cautioned that its initial Genesis project selections remain subject to award negotiations and do not guarantee funding.¹⁹ Businesses considering hiring, matching investments, or contributions of proprietary technology should therefore continue to evaluate the terms and status of each opportunity.

Taken together, the proposed framework could strengthen Federal research by combining clearer national priorities, more varied public-private partnerships, improved evaluation, broader access to research infrastructure, and closer links among discovery, workforce development, commercialization, and production. The business value will depend on whether agencies offer practical pathways for firms of different sizes while maintaining transparent competition, sustained investment in foundational research, and modern laboratories and facilities, with funding sufficient to support the scientific and technical workforce on which private innovation depends.

For businesses, the principal opportunities are greater access to Federal funding, infrastructure, data, researchers, and commercialization partnerships. The principal risks involve uncertain funding, complex intellectual-property arrangements, competition with larger firms, and potential disruption to the university research and talent system. The overall effect will ulitimately depend on the agency programs, funding decisions, and selection processes used to implement the new framework.

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