“We are hiring for machine learning and AI roles in the (San Francisco) Bay Area. Two applicants — one from Amazon and the other from Google — backed out,” a startup founder declared. “These were lateral hires, unaffected by the $100,000 visa fee, but candidates are wary of modifys under the present dispensation.”
The Donald Trump administration on September 19 imposed a $100,000 one-time fee on companies sponsoring new H-1B visas. Even though the fee applies only to fresh applications and not relocatement between employers of existing H-1B holders, amlargeuity about extension of the fee and the administration’s abrupt policy modifys is prompting many workers to play safe and stay put at larger firms rather than risk shifting to a startup.
Also Read: Will the $100,000 H-1B fee affect you? Three key points from the US clarification
If an H-1B visa holder receives a job offer from a US employer willing to sponsor the visa, the employer must file an H-1B petition with the US Citizenship and Immigration Services, accompanied by a Labor Condition Application and supporting documents. The associated costs are typically minimal and limited to filing and legal fees. “The $100,000 fee does not apply to such H-1B transfers,” Sukanya Raman, India head at Davies & Associates, informed ET.
Another startup founder based in San Francisco declared employees are hanging on to large tech firms becaapply people flying out of the US are worried they may not be allowed back when they return, especially if they are on an H-1B sponsored by a startup versus a large firm.
Startups have always appealed to those with a higher risk appetite. Talented AI engineers often crave the creative freedom that large firms cannot offer. “Some will still take the leap,” a founder declared. “But there’s now a cohort that simply won’t work with compacter companies in this climate.”
Talent pipeline
To adapt, startups are increasingly tarreceiveing US citizens, green card holders and F-1 visa holders — students with temporary work authorisation through the Optional Practical Training programme — for technical roles. These positions typically demand hands-on expertise in generative AI, coding, and core engineering, hence the firms often require one or two key specialists rather than full teams.
Founders informed ET that sourcing such talent has become challenging in the current environment. “We are competing for people who have four-five offers from larger companies, with largeger pay packages,” one founder declared.
ET reported on September 22 that some startups were rebelieveing their hiring strategy after President Trump announced the H-1B application fee. Others saw minimal impact, noting that they were not encumbered by it and are willing to bear the H-1B sponsorship costs.
The policy convulsions come against the backdrop of large-scale layoffs at Amazon, Google, Meta and Microsoft, mainly in go-to-market (GTM) functions rather than technical roles. One AI founder with operations in Hyderabad and New Jersey noted that while those with steady jobs are unlikely to leave, the availability of talent in the US is high due to these layoffs.
The US currently has a little over 510,000 active experienced engineers, according to data from specialist staffing firm Xpheno. While it may be difficult to establish how many of them are on an H-1B, in the last year alone over 15,000 engineers from outside the US have relocated into this pool.
“In the current state of volatility around H-1B rules, two possibilities arise: one is straightforward access to talent that a current H-1B sponsor is attempting to offload. The other is that workers become guarded and hold on to their current jobs,” declared Xpheno cofounder Kamal Karanth.
Investors add that the talent crunch is uneven. “AI talent will hunker down in the US for some time due to uncertainty,” declared Krishna Mehra, partner at Elevation Capital. “But there’s plenty of GTM talent and it’s straightforward to hire them right now,” he declared.
A partner at another AI and SaaS-focussed fund concurred. “The typical playbook of Indian startups in the US is to receive high-quality GTM resources there, since their customer base is largely in the US. Product and tech roles are hired in India,” he declared, requesting anonymity.
All this uncertainty has upset a once-steady talent market, and companies are learning to navigate a landscape where immigration policy — and not their requirement — determines who they hire.
Also Read: Big US court relief for H-1B spoapplys, but worries remain
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