A groundbreaking proclamation signed by President Trump on Friday introduced a staggering $100,000 fee for new H-1B visa applicants, impacting skilled foreign workers. This significant policy change has sparked wildly different reactions from two prominent figures in the tech industry.
Selin Kocalar, the 21-year-old Chief Operating Officer of Delve, a San Francisco-based AI startup, discovered the new fee firsthand from a recently approved H-1B employee. Her 23-person company, which has secured $35 million in funding, is now facing a critical challenge: how to navigate hiring with this exorbitant new cost.
“Startups inherently operate on tight budgets,” Kocalar explained. “We simply don’t have the luxury of spending such large sums, a privilege often enjoyed by much larger corporations.”
Meanwhile, Reed Hastings, co-founder and chairman of Netflix, remained unfazed. He publicly praised the $100,000 fee on social media, hailing it as “a great solution” that would ensure H-1B visas are exclusively reserved for “very high-value jobs.” This perspective contrasts sharply with Netflix’s own financial standing, boasting 14,000 employees, over $11 billion in quarterly revenue, and $3.1 billion in profit.
These contrasting reactions underscore a profound shift ripping through the tech sector. The H-1B program, vital for recruiting thousands of skilled foreign workers like software engineers and AI specialists, now risks creating a stark division between industry giants and nascent startups. While well-established tech behemoths can easily absorb the new fee, smaller, resource-constrained startups are deeply worried about their capacity to secure top talent, as every expense is meticulously scrutinized.
This policy threatens to fundamentally alter the U.S. tech landscape, potentially tilting the competitive balance heavily towards established multi-billion dollar companies. Silicon Valley’s dynamism has long depended on a constant influx of innovative startups that evolve into industry leaders, a pipeline now at risk.
“This new fee will disproportionately impact smaller companies,” stated Aizada Marat, CEO of Alma, a Palo Alto-based immigration legal services startup specializing in employee visas. “We simply cannot compete with the financial might of giants like OpenAI and Meta.”
Should the steep $100,000 fee remain in effect, Marat’s company, which has raised $5.5 million and is reliant on foreign talent, confirmed they would be unable to hire employees through the H-1B visa program.
Entrepreneurs warn that this policy could severely undermine U.S. dominance in technology, particularly amidst the intense global competition with China in the field of artificial intelligence.
Jihan Merlin, Alma’s head of immigration strategy, acknowledged that the immediate impact might not be catastrophic, but cautioned, “Policy changes of this nature force businesses to reconsider establishing themselves in the U.S., which will gradually erode our national competitiveness.”
Previously, a standard H-1B visa, including all associated legal and administrative costs, typically amounted to around $10,000, according to Ms. Merlin.
For years, tech leaders and politicians have concurred on the urgent need for new strategies to attract and retain top global talent in the United States. The existing H-1B system, with its lottery-based allocation and an annual cap of 85,000 visas, has long been recognized as outdated and in need of comprehensive reform.
During his 2024 presidential campaign, Mr. Trump himself acknowledged these systemic issues, even proposing that all graduates from U.S. universities and junior colleges should automatically receive a green card. However, this suggestion was met with considerable backlash from some of his key supporters.
“Companies thrive on a strong talent pool,” he remarked on “The All-In Podcast,” a popular show among tech investors. “Excellent companies require brilliant minds.”
Trevor Traina, a San Francisco founder and former ambassador during Trump’s first term, views the new H-1B policies as merely “an opening bid” designed to kickstart a broader dialogue on immigration reform.
He expressed optimism, stating, “The tech industry would undoubtedly benefit from an increase in visas for skilled foreign workers, and many are hopeful this will ultimately lead to a sustainable, long-term solution.”
However, not everyone shares this optimism. Bilal Zuberi, 49, a managing partner at Red Glass Ventures, argues that this policy change severely disrupts the vital flow of top tech talent into the U.S., thereby compromising its crucial lead in the global AI competition.
“To disrupt this flow is essentially self-sabotage,” Zuberi asserted. He estimates that 30 to 40 companies he has supported throughout his investing career will feel the direct impact of these new regulations.
Zuberi suggests that startups might explore alternative strategies to bypass the H-1B fee. These could include leveraging the O-1 visa program for individuals with extraordinary abilities, or even establishing satellite offices in countries like Canada to recruit remote talent.
He concluded, “I don’t believe the solution for these companies will simply be to ‘just hire Americans.'”
Correction: An earlier version of this article inaccurately stated which companies Bilal Zuberi estimated would be impacted by the H-1B visa fees. He was referring to 30 to 40 companies he has personally supported throughout his investment career, not exclusively those under Red Glass Ventures.
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