Last Friday, President Donald Trump announced a bombshell change for the H-1B visa program, a popular avenue for U.S. tech companies to hire talent from foreign countries — a $100,000 application fee. The surprise executive order sparked chaos, confusion and panic as tech giants like Microsoft and Meta asked employees traveling abroad to return to the country within 24 hours. As some stateside companies lament another new and unexpected cost of doing business in the U.S., tech outfits in Europe have another message: Come work for us instead.
Stringent immigration policies and the threat of detention and deportation have already made the U.S. a less appealing work option for skilled foreign talent. But the new fees will be another boon to startups in hubs like London and Paris, which have long faced steady streams of young talent shipping off for the U.S., where the lure of Silicon Valley and high salaries has a magnetic pull. The new policy change will be unlikely to slow down the industry’s biggest companies like Alphabet and Meta, where $100,000 is a drop in the bucket, but for more resource-strapped startups, the fees could mean ceding an edge to companies across the Atlantic.
“To a lot of people in Europe, it’s like a blessing in disguise,” said Victor Riparbelli, CEO of London-based Synthesia, which makes generative video AI models. “I think it’ll end up becoming a net negative for the U.S.,” he said, adding that Europe could always use more skilled labor, especially when it comes to senior leadership roles like vice presidents and directors.
The new fees come as the talent wars in AI have reached new heights of intensity in recent months. Meta CEO Mark Zuckerberg spent billions to stockpile researchers and engineers for a new AI superintelligence team, offering ridiculously large salaries to individual candidates. Meanwhile, President Trump has made immigration a focal point of his administration, with the H-1B visa process his latest target — an attempt to push American companies to hire more stateside talent.
The H-1B visa program, created by Congress in 1990, makes 65,000 visas available each year for people with a bachelor’s degree or equivalent, with an additional 20,000 more for workers with a master’s degree or higher. A popular visa for the tech industry, H-1B requests have increased steadily over 2025, with an 150% increase between January and September, according to figures from Remote, an HR and payroll company. But the program has its detractors. Ahead of the White House’s announcement of the new fee, Commerce Secretary Howard Lutnik called it the “most abused visa.”
The new fees could further deter talent in Europe from leaving the region to head to America, but the perception of the U.S. had already been changing long before the announcement, said Vassili le Moigne, CEO of Prague-based InTouch, which makes AI tools to chat with the elderly. “The image of the U.S. as El Dorado is taking a hit,” said le Moigne, a shift that’s taken place over the last few months because Trump can be seen as a “bully” and the U.S. as “unwelcoming” because of the president’s hardline immigration policies.
Still, Europe will benefit from the damage it could do in the U.S. “We almost say thank you to Trump, in a way,” said le Moigne, who is French and was one of the earliest recipients of the visa, coming to the U.S. in 1991 on an H-1B. “He’s really helping us keep our talent.”
For early-stage American startups that can’t afford to pay a $100,000 toll for H-1B hires and typically rely on equity for compensation, the new fees means more trouble in an already competitive talent landscape. Y Combinator CEO Garry Tan said in a LinkedIn post that the fee “kneecaps startups” and companies that provide IT workers on a contractual basis, amid the fierce AI race. “Early teams can’t swallow that tax…This current policy outcome [is a] massive gift to every overseas tech hub.”
But for startups that are flush with cash, the new rule likely won’t have much impact. AI companies are already splurging (in some cases, millions) on top AI talent and $100,000 won’t make much of a difference. Jesse Zhang, CEO of AI customer service startup Decagon, said the fee would “make it harder to justify hiring new employees on H1-B,” but he doesn’t mind spending more on existing recruits. About 10% of employees at the nascent AI startup are on H1-B visas and the company is also planning to open an office in London that will help tap the country’s talent pools.
Immigration has always been a challenging and complicated process for tech workers in the U.S., thanks to ever changing byzantine regulations, strict eligibility requirements and long waiting periods. Under the Trump administration, things have become even more uncertain. Visa denial rates and requests for additional evidence supporting their visa applications , are both rising, said immigration attorney Emma Zhang. “Traditionally we would get straight approval with the evidence that we submitted,” Zhang told Forbes. “But now we’re getting what we call a blanket RFE, which is the government’s way of delaying the process and adding procedural obstacles.”
Xiao Wang, CEO of Boundless Immigration, compares the new fees to a “human tariff,” similar to how Trump imposed heavy taxes on goods and services imported from other countries. “This is the first real time that this country has gone in that direction.” On Tuesday, the Trump administration also proposed a dramatic change to the H1-B’s lottery-based system to favor more highly-skilled and highly paid employees. Under a newly proposed “weighted selection process,” when the demand for visas exceeds the 85,000 limit (which it usually does), greater preference will be given to senior level foreign employees. All these changes (and the uncertainty that comes with them), could also translate to fewer students deciding to pursue higher education in the U.S.
In response, countries like Canada and China are making changes like lowering their requirements and creating new types of visas to recruit talent. “Other countries are going to step into this void,” Wang said.
There could be other downstream effects of more talent staying in Europe, where salaries generally tend to be lower. For a mid-level engineer, European salaries range from $57,000 to $75,200, while U.S. salaries range from $110,100 to $133,700, according to research by Boundless, a Dublin-based HR and payroll company. But with a larger talent pool over time, tech salaries in the region could rise as European companies compete with each other for employees, said Charlotte Bax, CEO of Captur AI, a London-based startup that uses AI for logistics, like verifying deliveries and shipments were made. “It’s just simple supply and demand,” she said.
In the meantime, Bax is investing more to attract younger talent fresh from universities by doing more recruiting on U.K. campuses. It’s an initiative her company began before the H-1B visa announcement. But now, she said, “We’re doubling down.”
Iain Martin contributed to this report.