The Trump administration’s recent overhaul of the H-1B visa programme has drawn widespread criticism from the U.S. startup community after the government announced that the application fee would increase dramatically from between 2,000 and 5,000 dollars to 100,000 dollars per visa. The steep hike has alarmed founders and investors, many of whom warn that it could restrict access to global talent and stifle innovation across the country’s tech sector.
Speaking on a recent technology-focused podcast, Dominic-Madori Davis was joined by Jeremy Neufeld, Director of Immigration Policy at the Institute for Progress, to discuss the potential impact of the new visa rule on startups, entrepreneurs, and the future of tech employment in America.
One of the key revelations from their discussion was the existence of a major loophole that allows nearly 80% of H-1B applicants to avoid paying the new 100,000-dollar fee altogether. This exception, experts say, could heavily favour large outsourcing companies and established enterprises while putting smaller firms and early-stage startups at a disadvantage.
Another concern highlighted was the introduction of a revised wage system that could skew visa allocations. Under the new model, lower-paid roles such as experienced acupuncturists could receive more H-1B slots than highly paid professionals, including fresh AI PhD graduates earning around 200,000 dollars annually. This could significantly distort the distribution of talent and weaken the U.S. position in emerging fields like artificial intelligence and advanced computing.
Universities and national laboratories are also caught in uncertainty. Although they are expected to pay the higher fees, many remain unsure about how the rules will apply to them or when final guidance will be issued.
Industry experts warn that if the changes are implemented as proposed, startups may find it increasingly difficult to compete for top international talent, while larger outsourcing firms—many based overseas—could continue to dominate the visa pool through the exemptions.
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