What the H-1B crackdown means for the future of AI tech talent

For decades, the U.S. tech sector has relied on a steady stream of educated foreign nationals to help bolster staffing. The Trump administration's visa crackdown is making that practice harder for employers.

In 2025, the administration issued a proclamation raising the fees associated with H-1B visas in an attempt to slow the inflow of workers. The fee increase has been challenged in court, so the fee hasn't been collected, though the order that created it remains in place. U.S. Citizenship and Immigration Services (USCIS) has also been busy with a new wage-weighted lottery, effective Feb. 27, 2026, for the H-1B visa cycle that began in March.

On Oct. 8, 2026, the administration took another shot at organizations bringing in foreign workers. Vice President JD Vance held a White House press conference for the administration's Task Force to Eliminate Fraud, announcing that the Labor Department had suspended Microsoft from the Program Electronic Review Management (PERM) labor certification process. Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini were also suspended.

The tensions over foreign workers come at a time when AI talent immigration is becoming a big issue for the U.S. tech sector.

Georgetown University's Center for Security and Emerging Technology reported in its "Voices of Innovation" data brief that 70% of leading U.S. AI researchers active from 2010 to 2021 were foreign-born or foreign-educated.

What changed: A quick explainer

The Trump administration has always been focused on its Make America Great Again mandate, and the recent changes are in some respects a reflection of that effort.

PERM suspension: Who's affected and why it matters

PERM is the first step in most employer-sponsored green cards. The suspension does not revoke H-1B status or work authorization. Vance alleged that Microsoft laid off nearly the same number of U.S workers as the number of H-1B visas it obtained. Microsoft disputed the claim.

An employer typically starts with PERM to get a labor certification before filing an immigrant petition with USCIS. The employer must show there are "not sufficient U.S. workers able, willing, qualified and available" for the role, according to the Labor Department.

The USCIS website states that green card petitions for professionals with advanced degrees, known as EB-2, are "usually accompanied by" a certification.

"PERM status is not H-1B," explained Alex Bakker, director of primary research at ISG, a technology research and advisory firm. "So, PERM filing suspension hurts employees but not necessarily businesses, at least not in the immediate term."

The H-1B is a temporary U.S. work visa. According to the Department of Labor, it lets employers "temporarily employ foreign workers in the U.S. on a nonimmigrant basis" in jobs that require a bachelor's degree or equivalent in a specific field. Congress caps new H-1B visas each year, so employers compete for a limited number. Many workers later seek a green card through the same employer, which is why the PERM step matters.

There is, however, an important connection between the H-1B and PERM status to recognize. Pablo Aponte, an immigration attorney at Par Lawyers, noted that a worker in H-1B status can normally remain in the U.S. for six years.

"Extensions beyond that depend on a green card case that has been pending long enough or an approved immigrant petition," Aponte said. "Freeze the PERM, and you remove that basis for anyone who hasn't reached it yet."

H-1B lottery shifts: Wage weighting and selection odds

A Department of Homeland Security (DHS) rule change that took effect on Feb. 27 revised how USCIS runs its H-1B lottery to select registrations. Employers now get more lottery entries for higher-paid roles, with four entries for the top wage tier, three for the next, two for the third and one for the lowest.

There remains an ongoing challenge with the fees associated with H-1B visas. In 2025, the Trump administration proposed a $100,000 fee. On Sept. 18, the administration signed a new proclamation extending the fee through Sept. 21, 2027.

Judges have ruled against the government's rules for collecting the money. On June 8, a court in Massachusetts set those rules aside. On July 24, the First Circuit refused to pause that decision. On Sept. 30, a court in California set aside the rules covering both the original proclamation and the extension. It also barred the government from enforcing them.

The rulings strike the collection rules -- not the proclamation itself. The federal government is appealing the Massachusetts decision.

Business impact: Talent, timelines and costs

The business impact of the Trump administration crackdown on foreign workers extends across multiple areas of the IT sector.

Project risk and contingency planning

These employment restrictions pose a risk to ongoing and new projects:

• Planning risk. Organizations need to realize that work authorization affects project schedules and budgets. "Immigration risk now belongs in the project plan and workforce budget," said Priyanka Kulkarni, founder and CEO of Casium, an AI platform for employment-based immigration and visa management.
• The single-specialist problem. An overreliance on an individual who is not a U.S. citizen is another key risk. "The greatest exposure is a project that depends on one specialist with no viable next step for work authorization," Kulkarni said.
• Relocation budgets. Employers must acknowledge that workers who will reach the six-year H-1B limit might require relocation. "Over the next 12 months, companies should consider the costs of relocating employees who are approaching the six-year H-1B limit and may need to return to their home countries," said Shashi Bellamkonda, principal research director at IT research and advisory firm Infotech.

Price and contract renegotiations with outsourcers

The availability of skilled employees will also drive outsourcing considerations:

• Pricing and timelines. Cost and delivery timelines will be an issue. "If the firms enterprises rely on for managed services, IT staffing and project delivery face workforce pipeline constraints, expect pricing pressure and delivery timeline extensions in contract renewals," said Pramin Pradeep, co-founder and CEO of BotGauge AI, a platform for AI agent testing and observability.
• Offshoring. It's also possible that organizations will choose to offshore more as the pool of available talent in the U.S is reduced. "I have already seen companies expand their offshore teams in locations with working hours that overlap with the U.S. market," Bellamkonda said.

Near-term hiring market dynamics

Hiring costs are likely to be affected in several ways:

• Wages. "The wage-weighted lottery is designed to favor higher-paying positions, which structurally pushes average H-1B compensation upward," Pradeep said.
• Junior hires. Entry-level hires are less likely to be foreign workers under the new lottery rule. "An entry-level registration gets one entry against four at the top wage level," Aponte said.

AI advancement and competitiveness

The recent crackdown isn't specifically targeted at AI, but it's likely to disproportionately affect the sector.

It's a big problem if the most capable, most coveted AI talent give up on our immigration system.

National security and strategic tech sectors. A risk for both national security and the AI sector in the U.S is that top talent goes elsewhere.

It's a big problem if the most capable, most coveted AI talent give up on our immigration system," said Loren Locke, an attorney at Locke Immigration Law. "When people can't get stability and predictability for their family in the U.S., they turn toward other options in Canada, Europe, Singapore and other places."

R&D velocity, startup formation and enterprise AI adoption. The new rules for the H-1B lottery potentially place early-stage AI companies at a disadvantage.

The wage weighting counts salary, not equity. A startup that pays a modest salary and meaningful stock is ranked as a low-wage employer in the lottery, even when the total package is competitive," Aponte said. "That disadvantages early-stage AI companies against large incumbents."

Restricted talent will also diminish institutional and team knowledge inside the U.S, which will be hard to rebuild.

"I spent more than a decade building enterprise AI at Microsoft. These teams rely on complementary expertise. Losing one specialist can slow an entire team," Kulkarni said. "Tighter access risks moving research and engineering abroad and shrinking the pipeline from U.S. universities into U.S. companies."

Impact on current H-1B holders -- and employer obligations

Existing H-1B holders can retain their current status, though green card progress is likely going to be stalled across employers restricted by the Labor Department.

What HR must communicate now

With the new restrictions and the uncertainty surrounding immigration policy, each worker needs a plan.

"Staffing planning needs to begin now to ensure that critical projects continue without disruption," Bellamkonda said. He said CIOs should pay close attention to employees approaching the six-year H-1B limit.

Workers also need to understand that the green card process does not carry over when changing employers.

"Eligible H-1B workers can still change employers through portability, but their employer-sponsored green card process does not automatically move with them," Kulkarni said.

Timelines and legal counsel coordination

The timelines for employers and H-1B holders are also being affected.

"The biggest changes to existing H-1B workers and their employers are that there are now extremely long wait times to get an H-1B visa interview booked in India, and there was a policy change last year that visa applicants can only interview for a visa in their home country," Locke said. "Together, the effect is that most H-1B workers can't travel internationally, at least not without many months of planning."

Legal counsel should review each worker's options beyond PERM. "Counsel should assess PERM-independent routes, including EB-1 and EB-2 National Interest Waivers, where appropriate. Neither is a universal substitute or grants work authorization by itself," Kulkarni said.

Action plans for CIOs and CHROs

CIOs and chief HR officers should not sit idly by in the face of the enterprise IT workforce risks that the new restrictions pose. There are several steps that can be taken now.

Map critical roles and build redundancy. Create an inventory of roles tied to H-1B and green card pipelines to identify potential gaps.

"Companies should assess whether they can fill affected positions with American talent or maintain continuity through their international teams," Bellamkonda said.

Engage immigration counsel. Screen critical individuals for EB-1A, National Interest Waiver, O-1 and TN options. Confirm portability timing and dependent work authorization exposure.

Revisit vendor contracts. Review existing contracts, including service-level agreements, and add contingencies for staffing disruption.

"Amend the staffing contract. Require knowledge transfer and a remedy if key staff lose work authorization mid-project," Aponte said.

Evaluate multi-geographic hubs. Compare nearshore sites with hubs in Canada and Europe for AI teams.

Update risk registers. Add H-1B exposure to the company risk register. Then tell the board how it could affect project delivery, legal compliance and costs.

What to watch next

The situation remains fluid on the immigration policy front.

Court challenges over the $100,000 H-1B fee are ongoing. Another action that could affect foreign workers is the DHS proposal to end the discretionary 60-day grace period for H-1B and several other visa categories. Comments on that proposal are due Nov. 10, 2026.

CIOs should also track exemptions for strategic tech talent.

"The longer-term watchpoint is congressional movement on strategic talent exemptions, specifically for AI, semiconductor and cybersecurity roles where restricting foreign talent most directly harms U.S. competitiveness," Pradeep said. "There is bipartisan interest but no clear legislative momentum yet. CIOs in those domains should be tracking it through industry associations."

Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He has pulled Token Ring, configured NetWare and been known to compile his own Linux kernel. He consults with industry and media organizations on technology issues.