Trump’s $100,000 H-1B Fee Sparks Debate Over U.S. Tech Innovation

Over the weekend, President Donald Trump announced a policy that would require a $100,000 fee for new employer-filed H-1B visa applications submitted after September 21, 2025. In a proclamation, the White House said the system had been “deliberately exploited” to replace American workers with lower-paid, lower-skilled labor. The changes would apply only to new applications, not renewals, and White House officials stressed that the policy is intended to reform a program the administration views as flawed. Whether the president has the unilateral authority to set such a fee, and how the plan would be implemented and challenged in court, remained unresolved as the policy drew rapid scrutiny from industry and academia.

Tech policy experts say the proposal could backfire by pushing talent overseas, raising costs for research and development, and hindering U.S. innovation in fast-moving fields like AI. Giovanni Peri, an economics professor at the University of California, Davis, said foreign STEM workers have been an engine of growth in the United States. “Foreign STEM workers have been an incredible engine of growth,” Peri said, noting that multiple studies have found their presence tends to increase job creation and wealth for America writ large. Subodha Kumar, a professor at the Fox School of Business at Temple University, warned the new fee could undermine the very innovation and R&D that keep the United States competitive, adding, “A lot of the innovation and R&D work being done in the U.S. involves people on H-1B visas.”

The debate over the H-1B program has intensified in recent years. The administration has argued that a targeted reform is needed to address misuse, while backers of the current system say the program remains essential to the U.S. technology ecosystem. A Department of Homeland Security report found that 64% of approved H-1B petitions in the 2024 fiscal year were computer-related, underscoring the program’s significance to the tech industry. Industry leaders have long relied on skilled foreign workers to staff engineering, software development and research roles that drive AI advancement and other frontier technologies.

Reaction from Silicon Valley has been mixed. OpenAI’s Sam Altman said on CNBC that the goal should be to attract the best talent and streamline the process, especially when there is a clear financial incentive to do so. Netflix Chairman Reed Hastings called the plan a “great solution,” arguing it would ensure H-1B visas go to high-value roles and reduce the need for a lottery. In contrast, CoreWeave CEO Michael Intrator described the fee as “sand in the gears” for his company, highlighting the potential friction for mid-sized firms that rely on highly specialized engineers.

The policy could have outsized effects on the Indian IT ecosystem, where roughly 70% of H-1B holders originate. Critics warn that a higher cost could price Indian engineers out of U.S. opportunities or push them toward other countries with robust tech sectors, such as the United Kingdom or Canada, or back to India itself. Madeline Zavodny, an economist at the University of North Florida, cautioned that the long-term solution would require more than a price increase; she suggested exploring an auction system at the federal level that would let employers bid for the right to hire foreign workers via the H-1B program while exempting nonprofits, universities and similar institutions. Giovanni Peri added that raising the cap on H-1B allocations could improve efficiency, arguing that demand for high-skilled workers outstrips supply.

Beyond industry, the potential impact on universities, research institutes and nonprofits looms large. These entities sponsor researchers and postdocs who advance American leadership in science and technology, and many have benefited from H-1B sponsorship. Harvard University and other top research institutions sponsor substantial numbers of new H-1B petitions each year; officials there estimate that the added fees could amount to tens of millions of dollars annually if enacted across the board. Temple’s Kumar noted that while the longer-term goal might be to strengthen the domestic workforce, the immediate effect could be considerable disruption and confusion as institutions adjust to a tighter, more expensive system.

The debate over H-1B policy has crystallized into a broader question about how the United States should balance national interests with the need to remain a global hub for innovation. Peri described a tension within the administration between those who recognize the negative consequences of restricting immigration for ideological reasons and those who advocate broader cuts. “There are two types of people in the administration,” he said. “The ones who are very clear about the negative consequences—the Elon Musks and business people—and the people who want to cut immigration for ideological reasons.” The coming weeks will reveal how policymakers navigate these competing objectives, as legal challenges unfold and employers reassess recruitment and compensation strategies in a tighter, more expensive talent market.