h-1b visa program

President Trump’s new sky-high visa fees have shaken Silicon Valley’s tech giants as they contemplate a surge in the cost of hiring global talent and a new tactic the White House can use to keep Silicon Valley in line.

The tech industry was already navigating an economy with higher and unpredictable tariffs, when last week the Trump administration threw another curveball aimed directly at its bottom line: a $100,000 fee for the visas used to hire certain skilled foreign workers. The industry relies heavily on the H-1B visa program to bring in a wide range of engineers, coders, and other top talent to the United States.

The rollout has sparked confusion among businesses, immigration lawyers and current H-1B visa holders.

Over the weekend, the Trump administration clarified that the new fee will apply to new visas, isn’t annual and doesn’t prevent current H-1B visa holders from traveling in and outside of the country. Companies would have to pay the fee with any new H-1B visa petitions submitted after a specific time on Sept. 21, the White House said.

On Monday, the Trump administration also clarified that certain professions, such as doctors, may be exempt from the fee. Some observers are concerned that a selective application of the fee could be a way the White House can reward its friends and punish its detractors.

Meta, Apple, Google, Amazon and Microsoft have been strengthening their ties with the Trump administration by committing to invest hundreds of billions of dollars in the United States.

Still, immigration has long been a contentious issue between the Trump administration and tech executives, some of whom were on a H-1B visa before they co-founded or led some of the world’s largest tech companies.

One of the most vocal supporters of the H-1B visas: Elon Musk, who backed Trump but has publicly sparred with him after he led the federal government’s efforts to slash spending. Musk, who runs multiple companies, including Tesla, SpaceX and xAI, is a naturalized U.S. citizen born in South Africa and has held an H-1B visa.

Tech executives have said the H-1B visa program has been crucial for hiring skilled workers. Competition to attract the world’s best talent has been intensifying since the popularity of OpenAI’s ChatGPT sparked a fierce race to rapidly advance artificial intelligence.

The new fee could slow California’s development and the United States’ position in the AI race by making it tougher for companies — especially startups with less money — to bring in international employees, experts said.

So far this fiscal year, more than 7,500 companies in Californiahave applied forH-1B visas and 61,841 have been approved, data from the U.S. Citizenship and Immigration Services shows.

Tech companies use the visa program to hire computer scientists and engineers because the U.S. isn’t producing enough workers with the skills needed, said Darrell West, a senior fellow in the Center for Technology Innovation at the Brookings Institution.

Trump “likes to talk tough on immigration, but he fails to recognize how important immigrants are to our economy,” he said. “Companies in technology, agriculture, hotels, restaurants and construction rely heavily on immigrants, and slowing that flow is going to be devastating for companies in those areas.”

In his executive order, the Trump administration noted that some companies, such as information technology firms, have allegedly misused the program, citing mass layoffs in the tech industry and the difficulty young college graduates face in landing jobs.

“President Trump promised to put American workers first, and this commonsense action does just that by discouraging companies from spamming the system and driving down American wages,” Taylor Rogers, a White House spokesperson, said in a statement.

Economists and tech executives, though, have pointed to other factors affecting hiring, including economic uncertainty from tariffs, a shift in investments and the rise of AI tools that could complete tasks typically filled by entry-level workers.

California’s unemployment rate of 5.5% in August was higher than the U.S. unemployment rate of 4.3%, according to the U.S. Bureau of Labor Statistics.

The rollout of the new changes has been “extremely chaotic,” and while the White House has tried to clear up some of the confusion, tech companies still have a lot of questions about how the fee would work, said Adam Kovacevich, chief executive of the Chamber of Progress, a center-left tech industry policy coalition.

“You never know what you’re gonna end up with the final policy in Trump world,” he said. “Somebody within the administration drives an announcement, there’s blowback, and then they end up modifying their plans.”

Tech companies have been trying to navigate a fine line in their relationship with Trump.

During Trump’s first term, high-profile tech executives, including those from Meta, Amazon, Google and Apple, spoke out about his administration’s order to restrict travel from several majority-Muslim countries. But in his second term, those same executives have cozied up to the Trump administration as they seek to influence AI policy and strike lucrative partnerships with the government.

They’ve contributed to his inauguration fund, appeared at high-profile press events, and attended a White House dinner, where Trump asked them how much they’re investing in the United States.

Microsoft declined to comment. Meta, Google and Apple didn’t immediately respond to a request for comment.

Changes to the H-1B program could also worsen relations with other countries, such as India, that send skilled tech workers to the U.S., experts said.

Indian nationals are the largest beneficiaries of the H-1B visa program, accounting for 71% of approved petitions, followed by those from China, at approximately 12%.

Some Indian venture capitalists and research institutes see a silver lining in this murky future. On social media, some have posted that the uncertainty surrounding H-1B visa rules could encourage talented engineers to return home to build startups, thereby fueling India’s tech sector. That would mean more competition for U.S. tech companies.

Kunal Bahl, an Indian tech investor and entrepreneur, posted “Come, build in India!” on social media. His firm, Titan Capital, launched a seed funding and mentorship program aimed at attracting students and professionals rethinking their future in the U.S. after the visa troubles.

Global tech companies might also consider opening more centers abroad where workers can work remotely and not have to move to the U.S., said Phil Fersht, the founder and chief executive of HFS Research.

“The more the U.S. makes itself a less attractive place to bring in talent,” he said, “the more it is going to harm its economy.”

President Trump took his most extensive step yet toward overhauling the U.S. legal migration system, with a pair of proclamations that explicitly favor the wealthiest of the world’s prospective expat workers.

Trump on Friday imposed a $100,000 application fee on the widely used H-1B visa program, a move that would drastically increase the cost of visas heavily coveted by some of America’s largest companies — including in the Silicon Valley — seeking to bring in skilled workers from abroad.

The president also unveiled a “Trump Gold Card” visa program — under which, for the price of $1 million, immigrants could get U.S. residency. Businesses could buy residency permits for $2 million per employee, while a new “platinum”-level card set to be issued soon would cost $5 million and allow the holder to come to the U.S. for up to 270 days a year without being subject to U.S. taxes on non-U.S. income.

The restrictions and fees go into effect on Sunday.

It all amounts to a plan for a new gilded age of immigration to America, where those with the resources to invest are welcomed along with their wallets — while at the same time new barriers to entry are erected for those with lesser means and others seen as taking away jobs that could be occupied by U.S. citizens.

The pomp with which Trump announced the programs echoed the theme — over his right shoulder as he spoke to reporters in the Oval Office was an image of a gold card with his face on it along with traditional American images including a bald eagle, all in gold.

It’s a stark shift from America’s stance toward immigration historically, which welcomed those of various economic backgrounds coming to the country legally in search of a better life and more freedom.

‘Significant disadvantage’

Yet even while Trump and Commerce Secretary Howard Lutnick mused about the prospects of a windfall for the U.S. Treasury that could total $100 billion or more, immigration attorneys cautioned that a move of this magnitude would cause major disruptions — several of them potentially very expensive to the U.S. economy.

Cleveland-based lawyer David Leopold warned that Trump’s H-1B changes, including the $100,000 fee, would “effectively kill the program.”

“Who’s going to pay $100,000 for a petition? Unless you want to make this an exclusive program for extremely rich people,” said Leopold, a partner at UB Greensfelder, whose clients include physicians on H-1Bs.

Accenture, Cognizant Technology and other IT consulting stocks hit session lows on Friday on the news of the visa fee.

“This is a senseless, terrible policy for financial services firms that makes American firms less competitive in the global market for talent,” said Alexis DuFresne, founder of recruiting firm Archer Search Partners.

DuFresne warned that while some mega funds won’t be daunted by the prospect of a new six-figure fee to import top talent, “it will have a substantial impact at the margins — with mid-sized firms, smaller firms, and up-and-coming, younger talent at a significant disadvantage.”

“We have had clients who have said in the past, prior to this announcement, that they do not want to have to sponsor a visa. We anticipate that that will become a more prevalent part of our conversations with clients and their goalposts going forward.”

A feature, not a bug

Some of that sentiment, if it comes to pass, may be seen by this administration as an asset rather than a problem.

Senior members of Trump’s administration have repeatedly complained — in blunt terms — that too many immigrants are taking American jobs.

In a fact sheet, the White House said American workers are being replaced with lower-paid foreign labor and called it a national security threat. The dynamic is suppressing wages and disincentivizing Americans from choosing careers in STEM fields (science, technology, engineering and mathematics), the White House said.

Trump’s proclamation does anticipate a scenario whereby it can work around the new costs if they became a major burden, allowing for case-by-case exemptions if deemed to be in the national interest. That provision opens a potential window for certain companies or industries to seek an exception to the new fee.

Nonetheless, the intention to skew the H-1B program toward higher-paying jobs is clear.

Trump also plans to order the Labor secretary to undertake a rule-making process to revise prevailing-wage levels for the program, a move intended to limit the use of visas to undercut wages that would otherwise be paid to workers who are U.S. citizens.

Legal risks

Courts may also scrutinize the expansive new fees.

The H-1B $100,000 application fee in particular is at risk of being struck down as “excessive,” said Becky Fu von Trapp, an immigration lawyer in Stowe, Vt. That’s because federal law allows agencies to charge enough to recoup reasonable costs, and most work visa applications currently cost about $5,000. Even the most complex ones, for certain investment visas, usually run less than $10,000 in total.

The move could also incentivize technology firms and other companies reliant on foreign workers to set up offices outside the U.S. to avoid the application fee and associated hassles.

“Companies will reassess the need of who they really need to bring to U.S. and who can be based in Canada or Singapore, where they still have good technology infrastructure and can work remotely,” she said.

The move may also have a chilling effect on international students seeking admission to U.S. universities, since many of them hope to find jobs through the H-1B process upon graduation, she said.

Congress will also weigh in, Lutnick said, noting that lawmakers must also approve the planned platinum card program. He predicted that could happen later this year.

That’s easier said than done.

Republicans only narrowly control the House and the Senate. Immigration has been a particularly challenging issue to legislate for the GOP in years past, sparking clashes between the pro-business wing of the party that wants more high-skilled immigrants to come in, and another group far more skeptical of immigration as a whole who’ve sought to limit new arrivals no matter where they come from.

What’s more, Democrats are broadly furious about the president’s stepped-up immigration enforcement including aggressive Immigration and Customs Enforcement raids in major U.S. cities including Los Angeles. As such, they have little incentive to cooperate without demanding wholesale reversals of Trump’s existing immigration policies, which he almost surely wouldn’t accept.

Wingrove and Soper write for Bloomberg. Bloomberg reporters Katia Porzecanski and Hema Parmar contributed to this report.