A proposed $100,000 fee for H-1B visas by the Trump administration is generating significant concern within the U.S. technology industry. Experts and industry leaders warn the policy could severely disadvantage startups in the competitive market for artificial intelligence talent, potentially strengthening the dominance of large tech corporations and pushing skilled professionals to other countries.
Key Takeaways
- A new $100,000 H-1B visa fee has been proposed by the Trump administration.
- Tech startups may be unable to afford the high cost, limiting their ability to hire top international talent.
- Large technology firms like Google and Meta are better positioned to absorb the fees, potentially consolidating their market power.
- The policy could lead to skilled workers and tech jobs moving to international hubs like Canada and the UK.
The Financial Hurdle for Startups
The proposed visa fee represents a substantial financial barrier, particularly for early-stage companies. While major technology corporations can likely manage the expense, startups operating on limited budgets may find it impossible to hire crucial international talent.
Catherine Betancourt, a partner at a U.S. visa law firm, explained the disproportionate impact. She told Fortune that while large tech firms would be affected, "smaller employers are likely to be more severely affected than large tech firms as the fee for even one H-1B employee could be impossible to pay."
This financial strain comes at a critical time in the global AI race. Startups rely on a diverse talent pool to innovate and compete. The inability to hire skilled engineers from countries like India and China, which are major sources of H-1B applicants, could stifle their growth and development.
The Role of H-1B Visas in Tech
The H-1B visa program is a primary channel for U.S. companies to employ foreign workers in specialty occupations. The technology sector is a major user of the program. According to data from the U.S. Department of Labor, the professional, scientific, and technical services industry accounted for nearly half of all H-1B visas in 2025. Furthermore, nine of the top ten companies utilizing the visa are in the tech industry, including Microsoft, Google, and Meta.
Strengthening Big Tech's Position
Industry leaders argue that the new fee could inadvertently consolidate talent within a few dominant companies. Large corporations, some of which offer compensation packages exceeding $100 million for top AI researchers, would be undeterred by the $100,000 visa cost.
Gary Tan, CEO of the influential startup accelerator Y Combinator, noted the policy would have different effects on companies of different sizes. He stated the fee "won’t bother big tech," but it would "kneecap startups and bodyshops the same."
"Early teams can’t swallow that tax," Tan wrote in a social media post. "Bodyshops who abuse H1B should be stopped. There are ways to do that without entrenching big tech and throttling startups."
The concentration of talent could slow down the broader pace of innovation, as startups are often the source of disruptive technologies and experimentation. Greg Morrisett, Dean and Vice Provost of Cornell Tech, emphasized the importance of global talent for the U.S. economy.
"I don’t see how these changes will help American workers, and it will for sure hurt the American tech ecosystem, which is powering our economy," Morrisett said. "The U.S. leads in tech innovation because it has attracted the very best talent from around the world."
Impact of Skilled Workers on Startup Success
A 2020 paper from the National Bureau of Economic Research (NBER) found a direct link between H-1B visas and startup success. The research showed that startups with higher rates of H-1B employees were more likely to secure venture capital funding, file more patents, and achieve a successful exit through an IPO or acquisition. The study found that hiring just one additional high-skilled worker raises the probability of an IPO within five years by 23%.
A Potential Shift of Talent Overseas
A significant concern is that the high visa fee could drive skilled workers and jobs away from the United States. Research suggests that restrictions on high-skilled immigration often lead U.S. companies to hire talent in other countries.
A 2023 study by Britta Glennon, an assistant professor at the Wharton School, found that limits on H-1B visas push American multinational corporations to increase hiring abroad, particularly in Canada, India, and China. Her research indicated that for every H-1B visa rejection, U.S. firms hire an average of 0.4 new employees in their foreign affiliates.
International Tech Hubs Stand to Gain
Countries with more welcoming immigration policies for skilled workers could benefit directly from the proposed U.S. policy change. Tech hubs in Canada, such as Toronto and Vancouver, are often cited as potential destinations for talent unable to secure U.S. employment.
Gary Tan described the new fee as a "massive gift to every overseas tech hub." He added, "In the middle of an AI arms race, we’re telling builders to build elsewhere."
European countries, especially the United Kingdom, are also positioned to attract skilled professionals. London is already a major hub for AI research, with large offices for companies like Google DeepMind and Microsoft.
Chetal Patel, head of immigration at the law firm Bates Wells, told Fortune that Britain could become a more attractive option. "The UK, despite its own immigration cost, suddenly looks like a better deal," she said. Patel noted that while the UK has its own Immigration Skills Charge, "it pales in comparison to the punitive US fee hikes announced under the H-1B visa."
