Trump’s H-1B visa change “may cause startups to kneel,” experts say

It was a few days of chaotic days for the tech sector, and industry executives and experts are still evaluating how US President Donald Trump’s latest immigrant crackdown can shape the future of their workforce.

The Trump administration sparked widespread panic on Friday after employers announced they would pay a new $100,000 fee for the H-1B visa, a temporary work visa granted to highly skilled foreign professionals. These visas have supported the US technology workforce for decades.

Some high-tech executives including Netflix Co-founders Reed Hastings and Openai CEO Sam Altman praised the changes to the H-1B program, but experts told CNBC that the Trump administration’s change could prevent some tech companies, or startups, from securing top foreign talent. These experts said the change also poses a risk of driving top talent towards other countries.

Ekiel Hernandez, an associate professor at the University of Pennsylvania Wharton School, said:

The current annual cap for the H-1B visa is 65,000, and there are 20,000 additional visas for foreign professionals with advanced degrees.

2025, Amazon, Microsoft, Meta, apple and Google It is one of the top 10 companies employing the most H-1B holders. Prominent technical executives such as Microsoft CEO Satya Nadella and Google CEO Sundar Pichai Tesla CEO Elon Musk was an H-1B recipient early in his career.

As tech companies were rushing to respond before Trump’s declaration came into effect on Sunday at 12:01am ET, the White House quelled concerns on Saturday by making it clear that rates would only apply to new visas, not annually, but to current visa ownership renewals.

There could be more changes on the horizon.

The Trump administration teased the rules proposed Tuesday, saying H-1B recipients should be selected through a weighted process rather than a random process. According to the proposal, if the number of visa requests exceeds the limits of available locations and is based on wage levels, a weighting process occurs.

The proposed rules will be officially made public on Wednesday in the federal registers, but are subject to change after the administration reviews the initial public feedback.

In a post on Sunday in X, Hastings called the Trump administration’s $100,000 fee “a great solution.”

“That means the H1-B will be used for very high value jobs. This means that there is more certainty for those jobs, not the lottery is needed,” he writes.

Openai’s Altman expressed support for the update in an interview with CNBC’s Jon Fortt on Monday.

“We need to get the smartest people in the country, streamline the process and what we can outline financial incentives,” says Altman.

Historically, H-1B visas cost between $2,000 and $5,000 per application, according to the Immigration Law Group.

The new $100,000 fee is a big jump for a small cash-bound startup.

“In addition to that H-1B salary, we can’t find many startups willing to pay $100,000 per H-1B,” said Adam Kovacevich, CEO of Chamber of Progress, the left-leaning Technology Industry and Trade Association.

Even the large tech companies can feel some pain and need to reevaluate those who use the H-1B. But their deep pockets have advantages.

“Big companies like Microsoft and Google aren’t ideal for them, but they have a workaround,” said Hernandez of Wharton. “They can do offshore jobs, or they are people who can do acquisitions.”

Garry Tan, CEO of popular startup accelerator Y Combinator, criticised the Trump administration’s new rates and wrote in a post on LinkedIn, “organizing a startup” and “a massive gift.”

“In the middle of the AI ​​arms race, we are telling builders to build elsewhere,” Tan writes. “We need to win American Little Technology. It’s not a $10,000 toll plaza.”

China and other competitors are approaching significantly

US tech companies, big and small, compete with each other as they compete to develop the most advanced AI models and applications. Organizations like Meta are paying billions of dollars to hire top AI talents to try to win the edge.

The Trump administration’s changes to the H-1B program could complicate similar recruitment efforts.

“This means that we can attract these employees to places like our competitors, other countries, Asia, Canada and Europe to create new innovations,” said Stephen Hubbard, a data scientist with the American Council of Immigration, a nonprofit for immigration advocacy and research.

China is a major competitor in the war for talent. The world’s second largest economy has long fought against the United States for technical control and, more recently, for AI races.

Earlier this year, Chinese AI company Deepseek rattles the global market after claiming it would create a massive language chatbot that surpasses its competitors at a fraction of the cost. The news raised questions about the substantial amount of American tech companies being fired with AI.

Some experts are worried that visa changes can handle victory in China’s hands and send top talent overseas. The move also has more uncertainty than the prospects for work after graduation, which could discourage foreign students from attending US universities.

“These students are going to be at home after seeing this environment,” said Greg Morisset, vice president of Cornell Tech. “We’re giving feet to both China and India in terms of feeding the startup ecosystem.”

For Bradley Tusk, CEO of Tusk Venture Partners, changes to the H-1B program are simply “bad.” He said American companies need access to top talent to compete at the highest level.

“America’s competitive advantage has always been its ability to attract the best talent from around the world,” Tass said. “It’s illogical to limit your ability to recruit and compete.”

Watch: JP Morgan CEO Jamie Dimon talks about changes to H-1B visa