President Donald Trump’s executive order Friday imposing a new $100,000 annual fee on applicants to the H-1B visa program for skilled foreign workers not only threatens to upend the talent pipeline to Big Tech but seriously compromise their artificial intelligence (AI) ambitions.

The move sharpens a long-running debate over the program, and is expected to impact tens of thousands of employees at tech’s largest players who must now navigate confusion over the new rules. Critics contend H-1B visas suppress wages and displace American workers, while advocates such as Elon Musk say they are essential to attracting top global talent. In a separate order, Trump also introduced a so-called “gold card,” designed to fast-track visas for select immigrants willing to pay fees starting at $1.36 million.

Trump’s order is set to take effect on Sept. 21 and will apply only to new H-1B applications. However, companies would be required to pay the $100,000 fee for each worker annually for up to six years, Commerce Secretary Howard Lutnick said.

Shortly after Trump imposed the order, employees with H-1B visas at Amazon.com Inc., Microsoft Corp., and others who were outside the U.S. received notices from their companies imploring them to return before the new rules start.

The order cites “abuse” of the system and conditions entry on payment of the annual charge. But it also tilts talent in the direction of large companies that can afford such a steep fee.

The $100,000 fee imposed on new applicants could fundamentally alter how companies approach hiring decisions. Most H-1B applications come from the professional, scientific, and technical services sectors.

The H-1B visa program, capped at 85,000 applications annually since 2004, remains a key pipeline for foreign talent in the U.S. tech industry. Historically, applicants have faced administrative fees of roughly $1,500.

New data from U.S. Citizenship and Immigration Services (USCIS) shows demand is cooling, with applications for the coming fiscal year dropping to about 359,000, a four-year low. Last year, Amazon emerged as the program’s top beneficiary, followed by Tata Consultancy Services, Microsoft, Meta Platforms Inc., Apple Inc., and Alphabet Inc.’s Google, according to government figures.

None of those companies commented on the executive order, but at least one tech policy expert warned they will force firms to reassess their H-1B programs as they compete in the fast-moving AI market.

“I think this is going to mean that we’re fighting the AI war against China with one hand tied behind their back,” Adam Kovacevich, CEO of Chamber of Progress, told the New York Times. “There is a limited number of top talent in AI and some of that is foreign-born.”

Still, Big Tech is far better positioned to persevere under the new H-1B rules because they wield resources to pay for top talent. Apple and NVIDIA Corp. have shown the willingness and ability to pay fees or secure an exemption with certain tariffs while startups lack the financial clout.

“This $100k fee will advantage big tech companies who can afford it while shutting out smaller companies and startups, essentially concentrating talent and power among the tech giants,” Hemant Mohapatra, partner with Lightspeed India Partners Advisors, said in an email. “We should expect a major brain drain in the short-term, not just IT workers, but also highly skilled PhDs and research leaders in semiconductors, biotech, space, and robotics. Top talent will head to other countries such as the UK and Australia, where they’ll also have to face pushback on foreign workers.”

“The academic market will shift as well. Only the most hopeful international students who think they have a real shot of landing a visa after school will risk coming to the U.S.,” said Mohapatra, who worked in the U.S. for 15 years on an H-1B visa in critical sectors like semiconductors.

India’s leading technology trade association Nasscom expressed alarm over a recent immigration directive, citing the one-day implementation deadline as creating “considerable uncertainty for businesses, professionals, and students across the world.”

The concerns come as India remains the primary beneficiary of H-1B visa approvals, securing 71% of all approved applications last year, according to government data cited by Reuters. China ranked second with 11.7% of approvals.

Immigration attorney Tahmina Watson, founding partner at Watson Immigration Law, warned the ruling could prove fatal for many of her clients, predominantly small businesses and startups.

“Almost everyone’s going to be priced out,” Watson told the BBC, referring to the $100,000 entry threshold. “This is going to have a devastating impact.”

Watson noted that many small and medium-sized companies “will tell you they actually can’t find workers to do the job,” highlighting potential labor shortages in affected industries.

Added Sujay Saha, a business innovation and strategy consultant: “High-skilled jobs will likely move outside the U.S. in the long-run. We are already seeing other countries like the U.K. that are jumping at this opportunity, even offering some of the visa fee waivers.

“Globally, a lot of immigrants have been drivers and supporters of innovation. With the new reform, I’m sure alternative business models are going to appear and potentially someday, the ‘Silicon Valley’ could be built somewhere else.”

The directive has raised questions about its broader economic implications for businesses dependent on skilled foreign workers.

Industry experts suggest some companies may explore establishing operations outside the United States in response to visa restrictions, though such relocations present significant practical challenges.

The H-1B visa controversy has previously created divisions within Trump’s inner circle and support base, with advocates of the program clashing against critics including former White House strategist Steve Bannon.

Speaking to reporters at the White House in January, Trump acknowledged he understands “both sides of the argument” regarding H-1B visas.

During the 2024 campaign season, Trump courted the technology sector with promises to streamline talent acquisition processes. He went so far as proposing automatic green cards for college graduates.

“You need a pool of people to work for companies,” Trump explained during an appearance on the All-In Podcast. “You have to be able to recruit these people and keep these people.”

However, Trump’s approach to skilled worker visas has evolved over time. In 2017, during his first presidential term, he signed an executive order intensifying H-1B application reviews in an effort to strengthen fraud detection measures.

The policy shifts reflect the ongoing tension between economic demands for skilled workers and immigration enforcement priorities.