How the H-1B Executive Order Shapes AI Startup Hiring in 2025
Explore how the 2025 H-1B visa fee hike impacts AI startups’ hiring strategies, revealing why founders like Arko Chattopadhyay adapt with U.S. talent and alternative visas to stay competitive.
Key Takeaways
- The 2025 H-1B executive order imposes a $100,000 fee on new overseas petitions.
- Existing H-1B holders and pre-approved petitions remain unaffected.
- AI startups like Pipeshift focus on U.S.-based talent and alternative visas.
- Remote work and offshore hiring help bypass new H-1B restrictions.
- Startups absorb costs differently depending on funding stage and talent needs.
In September 2025, a seismic shift rattled the tech hiring landscape: the U.S. government slapped a $100,000 fee on new H-1B visa petitions for foreign workers outside the country. This executive order, aimed at tightening immigration rules, sent ripples through Silicon Valley and beyond. Yet, for Arko Chattopadhyay, CEO of AI startup Pipeshift, this headline felt more like background noise than a roadblock.
Arko, who co-founded Pipeshift in 2024 with Y Combinator’s backing, plans to hire up to 10 employees this year. Despite the steep new fee, his hiring strategy remains steady, leaning on U.S.-based talent, remote work, and alternative visa routes like the O-1. His story unpacks how startups navigate immigration hurdles without losing momentum.
This article dives into the 2025 H-1B executive order’s real impact on AI startup hiring, debunks myths about visa dependency, and reveals how founders adapt with savvy strategies to keep innovation humming.
Decoding the H-1B Executive Order
On September 19, 2025, President Trump signed an executive order that sent shockwaves through the tech world by imposing a $100,000 fee on most new H-1B visa petitions for workers outside the U.S. This order, effective September 21, 2025, aims to restrict entry for certain H-1B nonimmigrants and curb perceived abuses of the visa system.
But here’s the kicker: the order does not affect existing H-1B visa holders, approved petitions filed before the cutoff date, or those already working in the U.S. This means companies can continue to employ and transfer current H-1B workers without the new fee or restrictions. The main impact hits fresh petitions for overseas talent who have yet to start the process.
This nuance often gets lost in the headlines. The executive order targets future overseas hires, not the vibrant pool of skilled workers already embedded in the U.S. tech ecosystem. For startups, this distinction is crucial—it means ongoing hiring plans can proceed with less disruption than feared.
Leveraging U.S.-Based Talent
Arko Chattopadhyay, CEO of Pipeshift, embodies a pragmatic approach to hiring amid shifting immigration rules. His Bay Area startup plans to add up to 10 employees this year, yet the $100,000 H-1B fee hasn’t derailed those ambitions.
Why? Because most of his hires are already in the U.S. or on visa paths unaffected by the new order. For example, Pipeshift employs two U.S.-based workers: one with a green card and another on the Optional Practical Training (OPT) program, which allows international STEM graduates to work temporarily in the U.S. After OPT expires, Pipeshift can sponsor an O-1 visa for exceptional talent.
This strategy highlights a key insight: startups can tap into a rich domestic talent pool, including international students and visa holders already stateside, sidestepping the costly new fees. It’s a savvy way to keep the hiring engine running without breaking the bank.
Embracing Remote and Offshore Hiring
The executive order’s restrictions focus on physical entry into the U.S., leaving remote work untouched. Pipeshift’s workforce reflects this reality: four employees are in the Bay Area, while seven are based in India, where Arko himself hails from.
By employing remote workers offshore, startups can access top-tier AI talent without triggering the new H-1B fees or visa hurdles. This global distributed model offers flexibility and cost efficiency, especially for early-stage companies.
Arko notes that while bringing an engineer from Chennai to the U.S. would be ideal for collaboration, the $100,000 fee prompts a wait-and-see approach. Instead, remote work bridges the gap, allowing startups to nurture talent until it’s financially viable to invest in costly visa sponsorships.
Navigating Alternative Visa Pathways
The H-1B isn’t the only game in town. Pipeshift’s founders themselves are on O-1 visas, reserved for individuals with extraordinary ability and national or international acclaim. This visa allows them to work in the U.S. for up to three years and is funded by Y Combinator.
For startups, the O-1 visa offers a strategic alternative to the H-1B, especially for researchers and founders with strong credentials. However, it’s challenging for most young developers who lack scholarly publications or citations.
Still, for exceptional candidates, the O-1 route remains viable and unaffected by the new executive order’s fees. This pathway underscores the importance of building a strong professional profile and leveraging diverse visa options to maintain a competitive edge.
Assessing Startup Impact and Adaptation
The $100,000 fee hits startups differently depending on their stage and cash flow. Seed-stage companies, which typically hire fewer than six people, often rely on founders, local graduates, and OPT workers. For them, the fee is a significant hurdle.
Yet, as Arko points out, post-Series A or B startups with larger payrolls can absorb the cost for truly exceptional talent without much strain. This means the executive order acts as a filter, ensuring only the highest-skilled overseas workers enter via H-1B.
While some fear the order will cripple startups, the reality is more balanced. Startups adapt by focusing on local talent, remote work, and alternative visas, turning what seems like a blockade into a strategic pivot. The U.S. remains a magnet for AI talent, thanks to its dense ecosystem, rapid innovation, and venture capital flow.
Long Story Short
The 2025 H-1B executive order, with its eye-popping $100,000 fee, might seem like a showstopper for tech startups at first glance. But as Arko Chattopadhyay’s experience with Pipeshift shows, the reality is more nuanced. Startups lean heavily on talent already in the U.S., leverage remote work, and tap alternative visas like the O-1 to keep their teams growing. While the fee poses a challenge, especially for seed-stage startups with tight budgets, it also filters the H-1B program toward truly exceptional talent. This shift nudges startups to be more strategic, focusing on quality over quantity and embracing flexible hiring models. The tech ecosystem’s resilience shines through, adapting to policy changes without losing its innovative spark. For founders and investors alike, the lesson is clear: immigration policy is a moving target, but with creativity and foresight, AI startups can continue to attract and retain world-class talent. The future belongs to those who see hurdles as stepping stones, not roadblocks.