Who's paying Trump's H-1B fee?

1. Key Themes

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Theme 1: The $100K H-1B Fee Is Widening the AI Talent Gap Between Haves and Have-Nots

The Trump administration's $100,000 H-1B fee was designed to curb foreign tech hiring, but it is having the opposite effect at the top of the market — accelerating concentration of AI talent in the best-funded companies while strangling smaller startups.

"The hefty fee...has widened the gap between the best-funded startups and everyone else."

"There is a correlation between dry powder and hiring, and there is also a correlation between the haves and the have-nots." — Jody Thelander, founder and CEO of J. Thelander Consulting

Concrete data points: OpenAI landed 27 H-1B approvals in the first half of fiscal 2026, already surpassing its full-year fiscal 2025 total of 21. Stripe had 46, up from 23.

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Theme 2: Consumer AI Capital Is Bifurcating — Early-Stage Drought, Late-Stage Abundance

The consumer AI funding market has split into two entirely separate dynamics. Early-stage founders face a severe capital shortage while late-stage companies enjoy relative abundance. This divergence began in 2022 and is deepening.

"Dealmaking in consumer AI's early- and late-stage markets has diverged so sharply that they effectively function as distinct ecosystems."

"At the start of Q2, early-stage founders faced a severe shortage of capital with the capital demand-to-supply ratio running 4.2x, meaning founders are seeking $4.18 for every $1 invested."

"Combined B2C AI capital demand hit $2.9 billion in Q2 2026, 34% below trend — with the pullback concentrated in early-stage activity, which fell to 27% of demand from over 40% in Q4 2025."

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Theme 3: AI-Native Pharma Biotools Are Surging Past Pandemic Highs

VC dealmaking in pharma biotools — particularly AI-native tools — has broken through pandemic-era records, led by the services segment. This signals a meaningful investment opportunity at the intersection of AI and life sciences.

"VC dealmaking in the pharma biotools sector surged past pandemic highs in Q1, led by the services segment, as AI-native tools continued to rise."

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Theme 4: Big Tech Is Doubling Down on AI Infrastructure Spending

Alphabet's capital raise and Google's massive computing infrastructure commitment signal that hyperscalers are treating AI infrastructure as a winner-take-most race requiring massive, sustained capital deployment.

"Alphabet's $85 billion equity raise and Google's $920 million-a-month agreement with SpaceX for computing power show a commitment to the success of its own AI chips."

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Theme 5: Agentic AI Is Threatening to Permanently Reprice the $525B BPO Sector

Hedge funds are actively positioning against traditional business process outsourcing companies, citing agentic AI as an existential structural threat — not a distant risk.

"Hedge funds are aggressively shorting call center stocks as agentic AI threatens to permanently reprice the $525 billion business process outsourcing sector."

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2. Contrarian Perspectives

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Perspective 1: The H-1B Fee Is Actually Backfiring — Accelerating Foreign Talent Concentration at Top Labs

The consensus assumption is that a $100,000 fee on foreign hires would meaningfully slow H-1B hiring across the startup ecosystem. The data shows the opposite at the top: elite unicorns are hiring more H-1B workers than before, not fewer. The fee effectively functions as a moat for the best-capitalized companies.

"Nine months after the Trump administration's $100,000 fee on first-time H-1B visa approvals took effect, some top unicorns are actually hiring more H-1B employees than they did before."

"For the biggest AI labs, poaching may be displacing importing — many are hiring visa holders from other companies." The workaround: H-1B transfers (moving a visa holder from one employer to another) do not trigger the $100,000 fee.

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Perspective 2: Evergreen Fund Gates Are a Design Feature, Not a Distress Signal

The market has widely interpreted evergreen fund redemption gates — like the one recently triggered at Partners Group — as signs of stress or illiquidity crises. The reality, per PitchBook's analysis, is that most of these vehicles are functioning exactly as designed.

"Partners Group's evergreen gate wasn't a distress signal, but misconceptions alone could be enough to slow new launches and force the private wealth industry to rethink how it sells illiquid structures to retail investors."

"Most of these vehicles...include liquidity reserves and redemption queues that are functioning as designed."

The risk here is not fund dysfunction — it is narrative contagion that could chill the entire retail private markets democratization story.

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Perspective 3: Early-Stage Consumer AI Weakness Is a Leading Indicator for Late-Stage Trouble in ~12 Months

Late-stage consumer AI looks healthy today, but the early-stage drought is a forward-looking signal the market may be misreading as two unrelated phenomena.

"That early-stage deceleration is a leading signal, typically front-running late-stage activity by roughly a year. If fewer early-stage companies are funded, the funnel for late-stage 'survivors' will be smaller by definition."

"Conditions swung from neutral to deeply investor-friendly in 18 months, handing significant pricing power to capital allocators in the process."

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3. Companies Identified

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4. People Identified

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5. Operating Insights

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Insight 1: Route Around the H-1B Fee via Visa Transfers, Not New Applications

Companies that still need foreign AI talent but want to avoid the $100,000 first-time H-1B approval fee have a viable, legal workaround: hiring H-1B holders already employed at other companies. Transfers do not trigger the fee. This is already the de facto strategy at top AI labs.

"Her clients have shifted their hiring practices, prioritizing H-1B transfers from other companies and other hiring mechanisms that do not trigger the $100,000 fee." "For the biggest AI labs, poaching may be displacing importing — many are hiring visa holders from other companies."

Actionable takeaway: Operators competing for AI talent should audit their recruiting pipeline to prioritize H-1B transfer candidates and build relationships with immigration counsel who can structure compliant transfer agreements.

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Insight 2: Seed and Series A Consumer AI Is Now One of the Best Buyer's Markets in a Decade — But Only for Investors

The demand-supply imbalance at early stages of consumer AI ($4.18 sought for every $1 deployed) means investors with conviction and dry powder hold extraordinary pricing power. Founders, conversely, must come to market with extreme defensibility or face prolonged fundraising timelines.

"It's a buyers' market for seed and Series A investors in consumer AI, with one of the most favorable entry points in a decade." "Primarily a flight to defensibility, rewiring consumers' preferences is exceedingly difficult, which pushes capital towards infrastructure and B2B opportunities."

Actionable takeaway: Early-stage consumer AI founders should prioritize proving behavioral lock-in and switching costs before approaching investors. Investors should be actively deploying at seed/Series A in consumer AI where entry prices are compressed.

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Insight 3: SaaS Remains the Highest-Conviction VC Vertical by Projected Returns

Despite AI disruption narratives, SaaS companies are projected to outperform the cross-vertical VC average by a meaningful margin.

"SaaS companies are projected to outperform the cross-vertical average of 21.2% by 4.6% on an annualized basis. Agtech, gaming and healthtech verticals are likely to underperform."

Actionable takeaway: Portfolio construction should continue to overweight B2B SaaS relative to consumer-facing verticals, agtech, and healthtech in the current cycle.

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6. Overlooked Insights

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Insight 1: PE Dealmaking in Construction and Engineering Hit an All-Time High in Q1, Driven by Grid Infrastructure

This is mentioned only briefly in the newsletter's "Catch Up Quick" section, but it signals a significant and underappreciated capital deployment theme tied to energy grid modernization — a multi-decade infrastructure buildout with durable demand irrespective of AI hype cycles.

"PE dealmaking in the construction and engineering sector hit an all-time high in the first quarter, driven by the grid infrastructure segment."

This connects to the broader AI infrastructure buildout (data centers requiring massive power) and domestic energy policy tailwinds, making grid infrastructure a high-conviction PE theme worth monitoring closely.

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Insight 2: Late-Stage Consumer AI Is Expected to Normalize Toward Neutral Within 6–9 Months

The newsletter flags that late-stage consumer AI — currently the one bright spot — is expected to drift back toward neutral conditions in the near term, with early-stage remaining depressed into 2027. This compressed window of late-stage friendliness is not widely foregrounded in the headline narrative.

"Given interest rate projections, late-stage dealmaking is expected to drift toward neutral over the next six to nine months, with early-stage dealmaking likely to stay elevated into 2027."

Late-stage consumer AI companies sitting on strong metrics should consider accelerating their raise timelines now, before the window closes.