Welcome to the AITX Community AI Policy Update
My name is Logan Le-Jeffries, and I am an ambassador for the AI Innovation in the Law Program at the University of Texas School of Law led by Kevin Frazier.
My goal is to provide you with a snapshot of policy issues that should be on your radar, with a focus on any policy shifts that could impact technology developers and start-ups in Texas.
TL;DR - AI Policy Update #4
The federal government now mandates a $100,000 fee for new H-1B visas starting September 21, 2025 which transforms what was a $6,000 administrative cost into a six-figure barrier. This 1,600% increase will likely price out Texas startups from international hiring while possibly creating a temporary surge of F-1 students desperate to secure permanent positions before their work permits expire. Combined with proposed international enrollment caps at universities like UT Austin, these policies signal a fundamental shift in how Texas tech companies must approach talent acquisition.
Full Breakdown
Understanding the H-1B Proclamation
The White House proclamation introduces an unprecedented change to H-1B visa policy: a mandatory $100,000 fee for any new H-1B petition filed after September 21, 2025. This represents roughly a 1,600% increase from previous filing fees, which typically range from $1,710 to $6,460 depending on company size and expediting options. The proclamation's scope is specific but significant. Current H-1B holders maintain their status without additional fees, and renewals remain unaffected. Furthermore, current holders are free to travel in and out of the country without any additional fees.
Impact on Texas's Technology Sector
The technology industry will bear the primary burden of this policy shift. Currently, computer science and IT-related positions account for approximately 65% of approved H-1B petitions nationally, with Texas consistently ranking third among states for H-1B approvals.
For Texas's diverse tech ecosystem, the impacts vary considerably by company size and stage. Large employers like Oracle, Dell, and Texas Instruments can likely absorb the increased costs for critical hires, though they'll undoubtedly become more selective. However, for Mid-sized companies and startups, particularly those in Austin's vibrant tech scene, this change will serve as a herculean barrier to international hiring.
One possible unexpected consequence involves Texas's current international student population. The state currently hosts approximately 80,000 students on F-1 visas, many pursuing STEM degrees. Under previous conditions, these students might have returned home after graduation with the option to re-enter the U.S. workforce via H-1B. The $100,000 fee fundamentally alters this calculation. Students who might have pursued opportunities abroad now face a substantial opportunity cost to leaving, potentially increasing the pool of international talent seeking to convert their student status to permanent employment before their Optional Practical Training expires.
Don’t Hold Your Breath Yet…
A federal lawsuit filed in California challenges the administration's authority to impose such fees through executive proclamation. While the outcome remains uncertain, the timeline for resolution could extend beyond the proclamation's built-in 12-month expiration date.
This limitation is important. Unless extended, the proclamation expires in September 2026, suggesting the administration may view this as either a temporary measure or a pilot program to assess impacts before pursuing permanent changes through legislative channels.
Broader Policy Context
The H-1B fee increase aligns with other recent federal initiatives affecting international participation in American higher education and workforce development. The administration recently proposed agreements with nine flagship universities, most important among them being UT Austin, offering preferential federal funding in exchange for international enrollment caps and tuition freezes. While UT Austin hasn't committed to these terms, the parallel timing suggests a coordinated approach to reshaping international talent pipelines.
For Texas technology companies, these converging policies signal the need for strategic adaptation. The traditional model of supplementing domestic talent with international hires faces mounting constraints. Although these changes may be short-lived, failure to plan accordingly could be costly.
(1) These other universities include: Vanderbilt, University of Pennsylvania, Dartmouth, University of Southern California, Massachusetts Institute of Technology, University of Arizona, Brown University, and University of Virginia
Looking Ahead
The $100,000 H-1B fee fundamentally alters the economics of international hiring. Whether this represents a temporary disruption or permanent restructuring of skilled immigration remains to be determined. Texas technology companies must navigate this uncertainty while making immediate decisions about talent pipelines. The coming months will reveal whether the policy achieves its stated goals of promoting domestic employment while maintaining America's—and Texas's—innovation advantage.