Several Indian founders have relocated to the US over the past year to be closer to the AI hub in San Francisco to tap talent, stay close to customers and spot trconcludes early.
The sector has also seen increased interest from the investors. Generative AI startups in India raised $525 million in 2025, a fourfold jump from $129 million in 2021.
The founder of an AI startup, currently in the US to raise funds, stated it had initially planned to hire a team in the US, particularly fresh graduates. “After the talk about increasing H-1B wages and the uncertainty around the visa, we are now planning to hire in India,” he stated. However, the company still plans to hire Americans for sales and business development roles.
On September 19, the Trump administration issued a proclamation that mandated $100,000 in fees for new H-1B petitions for enattempt into the US.
The development could force the fledgling sector to alter growth strategies. ET had earlier reported that companies had already been already facing hurdles in securing even temporary visitor and business visas (B1/B2) or the O-1 visa, which is preferred by founders.
Immigration experts stated the new H-1B fee could weigh heavily on startups. “For startups, $100,000 is a significant amount and might not create sense for them,” stated Gnanamookan Senthurjothi, founder of The Visa Code.
The modifys will also affect H-1B holders who want to launch businesses in the US, stated Chaitanya Chokkareddy, cofounder of Ozonetel, a customer experience platform.
Also Read: IT facing $150-550 million in immigration bill
Divij Kishore, founding attorney at Flagship Law, a US-based immigration firm, agreed. He noted that entrepreneurial H-1B petitioners now face the choice of incurring extraordinary costs or abandoning their ventures. The revised rule does, however, allow entrepreneurs to self-sponsor H-1B visas through their startups.
Some founders are of the view the impact may be limited. AI startups, they argue, are focapplyd on hiring highly skilled talent, and founders are willing to pay for the right people.
Sandeep Kohli, cofounder of Divyam.ai, a Bengaluru-based AI startup exploring a US foray, stated the policy is unlikely to affect its plans.
“When it comes to AI, the focus is on skills, and we are willing to pay for that. In fact, we see this relocate as an advantage, as it could bring quality talent back to India,” he stated.
Startup founders hire early employees on either O-1 (individuals of extraordinary skills) or H-1B, stated Atal Agarwal, founder of San Francisco-based OpenSphere and LegalBridge.
Also Read: Tech talent ‘wapsi’ may boost India’s AI, SaaS, deep-tech
“Clearly, they won’t be able to absorb the new cost,” he stated. “Remote work might become more prominent among startups now through open platforms. They are unlikely to outsource work to other providers becaapply that’s very inefficient and does not align with startup culture.”
The view was echoed by Mayank Pratap, cofounder of Supersourcing, a recruitment-tech firm focapplyd on sourcing AI talent.
“There is no way startups can afford the high H-1B fees no matter how adequately funded they are,” stated Pratap. “In 2025, AI startups have evolved as lean teams employing only founding engineers while majority work is done by remote workers in Dubai, Singapore, India, Philippines.”
Jeffrey Wang, cofounder of San Francisco-based Exa AI Labs, stated that 50% of the firm’s engineering team is not American and counting children of immigrants it adds up to 85%.
“The H-1B modify is obviously terrible for innovation. Luckily there are other programmes, like O1. We are 4/4 on O-1 apps. If you’re a talented engineer that wants to relocate to SF, pls DM me!” he posted on X.
Also Read: Steep fees may steer techies to cheaper L1, O1 visas
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