When President Trump announced a staggering $100,000 fee for new H-1B visa applicants—a program vital for skilled foreign workers—the tech industry reacted in two vastly different ways.
Selin Kocalar, the 21-year-old chief operating officer of Delve, an artificial intelligence startup in San Francisco, was caught off guard. She learned of the change from a new employee who had just secured their H-1B visa. Now, leading a 23-person company with $35 million in funding, Kocalar faces the daunting task of re-evaluating her hiring strategy. “As a startup, you’re always tight for cash,” she explained. “So you can’t go out and spend a bunch of money or have that kind of luxury that you’d see at a bigger company.”
Meanwhile, Reed Hastings, the influential chairman and co-founder of Netflix, remained unfazed. On social media, he declared, “Trump’s $100k per year tax is a great solution.” He believes it will ensure “H-1B is used just for very high value jobs.” With approximately 14,000 employees and recent quarterly revenues exceeding $11 billion (and $3.1 billion in profit), Netflix exemplifies the tech giants who can easily absorb such costs.
These contrasting reactions highlight how the Trump administration’s visa policy is creating a stark divide within the tech industry. H-1B visas are crucial for thousands of software engineers, AI specialists, and other talented individuals. While established tech behemoths can readily absorb the new fee, smaller startups are grappling with how to attract and afford top talent, particularly given their tight budgets and meticulous spending.
This policy shift could fundamentally alter the U.S. tech landscape, tipping the scales heavily in favor of well-established, multi-billion-dollar corporations. Silicon Valley’s innovative spirit thrives on a continuous influx of new startups that drive groundbreaking ideas and technologies, some of which eventually mature into industry leaders.
“This will be a disproportionate hit on smaller companies because we cannot compete with OpenAI and Meta,” asserted Aizada Marat, CEO of Alma, an immigration legal services startup in Palo Alto, California, which assists companies with employee visas.
If the government’s $100,000 fee remains, Marat indicated that her company, which has secured $5.5 million in funding and relies on foreign workers, will be unable to utilize the H-1B visa program for new hires.
Some entrepreneurs argue that this shift could ultimately undermine U.S. leadership in technology, especially amidst the intense global competition in artificial intelligence with nations like China.
Jihan Merlin, Alma’s head of immigration strategy, believes the new visa fee won’t have an immediate impact, “but policy changes like this make people think twice about bringing their companies to the U.S.,” she cautioned. “And over time, that’s going to change our competitiveness as a country.”
Merlin noted that a typical H-1B visa usually costs companies around $10,000, including legal and administrative expenses.
For years, tech leaders and politicians have agreed that the United States needs improved strategies to attract and retain top talent, and that the existing system for allocating skilled foreign worker authorizations was due for an overhaul. The H-1B program has historically relied on a lottery system, capping visas at 85,000 annually.
In June 2024, during his presidential campaign, Mr. Trump recognized these challenges, proposing that any graduate from a U.S. university or junior college should receive a green card to live and work in the country. This idea, however, was met with resistance from some of his staunchest supporters.
“You need a pool of people to work for your companies,” Trump stated on “The All-In Podcast,” hosted by several tech investors. “You have great companies, and they have to be smart people.”
Trevor Traina, a San Francisco-based founder who served as an ambassador during Mr. Trump’s first term, characterized the new H-1B adjustments as an “opening bid” designed to provoke a broader discussion on immigration.
“The tech industry would benefit from more visas for skilled foreign workers and I’m sure many are hoping this will lead to a good long-term solution,” he commented.
However, many remain skeptical. Bilal Zuberi, 49, a managing partner at Red Glass Ventures, argues that the policy change disrupts the flow of top tech talent to the U.S., jeopardizing its competitive edge in the global AI race.
“Disrupting that is really shooting ourselves in the foot,” Mr. Zuberi lamented, estimating that these changes would impact roughly 30 to 40 companies in Red Glass Ventures’ investment portfolio—nearly half their total.
Mr. Zuberi suggested that startups might explore alternative strategies to circumvent the new H-1B visa fee, such as utilizing the O-1 visa program for individuals with extraordinary talent or establishing offices in countries like Canada to hire remote staff.
“I don’t think the answer for these companies is going to be ‘Oh, why don’t we just hire Americans?’” he concluded.