A recent proclamation signed by President Trump, introducing a staggering $100,000 fee for new H-1B visa applications, has triggered sharply divided reactions among leaders in the technology sector.
Selin Kocalar, 21, the chief operating officer of Delve, an artificial intelligence startup based in San Francisco, found out about the change from a new employee who had just secured an H-1B visa. She’s now grappling with the profound implications this fee will have on hiring within her 23-person company, which has managed to raise $35 million in funding.
“As a startup, you’re always tight for cash,” Kocalar 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.”
In stark contrast, Reed Hastings, the chairman and co-founder of Netflix, reacted with indifference. On social media, he declared, “Trump’s $100k per year tax is a great solution. It will mean H-1B is used just for very high value jobs.” Netflix, with its approximately 14,000 employees, recently reported over $11 billion in revenue and $3.1 billion in profit in its latest financial quarter.
An image shows people gathered around windows in the offices of Delve, an artificial intelligence startup in San Francisco. Delve’s chief operating officer expressed concerns about how the H-1B visa fee changes would impact the company’s hiring. (Credit: Carolyn Fong for The New York Times)
These opposing views highlight how the Trump administration’s updated visa policy is creating a chasm within the tech industry, particularly impacting companies that rely heavily on H-1B visas to recruit thousands of skilled professionals like software engineers and AI specialists. While tech behemoths possess the financial capacity to absorb this new expense, smaller startups are deeply worried about their ability to attract and retain talent, especially given their constrained budgets and meticulous spending habits.
This policy shift could fundamentally alter the U.S. tech landscape, potentially favoring established giants over the innovative startups that drive Silicon Valley’s dynamism. The region thrives on a constant influx of new ventures, many of which eventually evolve into industry leaders, pioneering new ideas and technologies.
“This will be a disproportionate hit on smaller companies because we cannot compete with OpenAI and Meta,” stated Aizada Marat, CEO of Alma, a Palo Alto-based immigration legal services startup that assists companies with employee visas.
Marat emphasized that if the government’s $100,000 fee remains in effect, her company, which has secured $5.5 million in funding and depends on foreign workers, would be unable to hire through the H-1B visa program.
A photograph of Selin Kocalar, Delve’s chief operating officer, in her office. She commented on the financial strain: “As a startup, you’re always tight for cash.” (Credit: Carolyn Fong for The New York Times)
Some entrepreneurs fear that this change could ultimately undermine U.S. technological leadership, particularly amid a fierce global competition in artificial intelligence with nations like China.
Jihan Merlin, Alma’s head of immigration strategy, acknowledged that the new visa fee might not have an immediate impact nationwide. However, she warned, “policy changes like this make people think twice about bringing their companies to the U.S. And over time that’s going to change our competitiveness as a country.”
According to Ms. Merlin, a standard H-1B visa typically costs companies around $10,000, covering legal and administrative expenses.
For years, tech leaders and politicians have agreed on the need for improved methods to attract and retain global talent in the U.S., recognizing that the existing system for skilled foreign worker authorization was due for reform. The H-1B program has historically relied on a lottery system, with an annual cap of 85,000 visas.
In June 2024, former President Trump addressed these concerns during his presidential campaign, suggesting that graduates of U.S. universities and junior colleges should automatically receive a green card to live and work in the country. However, some of his staunchest supporters strongly opposed this idea.
“You need a pool of people to work for your companies,” he remarked on “The All-In Podcast,” a show hosted by several prominent 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 Trump’s first term, described the new H-1B adjustments as an “opening bid” to reshape the broader immigration conversation.
“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 added.
An image shows President Trump answering questions from reporters aboard Air Force One. He signed a proclamation on Friday that introduced a $100,000 fee for new H-1B visa applicants. (Credit: Kenny Holston/The New York Times)
However, others remain skeptical. Bilal Zuberi, 49, a managing partner at Red Glass Ventures, argued that the policy change disrupts the flow of top tech talent into the United States, jeopardizing its competitive edge in the global AI race.
“Disrupting that is really shooting ourselves in the foot,” Mr. Zuberi asserted. He estimated that these changes would impact roughly 30 to 40 companies supported by Red Glass Ventures – representing about half of their investment portfolio.
Zuberi suggested that startups might explore alternatives to the new H-1B visa fee, such as utilizing the O-1 visa program for individuals with extraordinary abilities, or establishing international 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.