I did my PhD funded for 3 years off of NIH and the remaining year and so off of corporate research grants. I really valued the fact that I was working on an industrial project, and could see it come to life with real funding and real backing.

The critical part imho will be allowing for enough independence in research, and that the time isn't just wasted filling in remedial RAs pushing pipettes around. Real safeguards will be needed, likely overseen by the PI and committee.

I genuinely hope it works and helps industry "figure out" that R&D is more than just simply productizing over the next quarter.