H-1B Visa

Anyone who wants to work in the United States but does not hold a US passport needs official authorization to do so. One such authorization is called the H-1B visa. It applies to occupations that typically require a university degree: software development, engineering, medicine, research. Unlike a tourist visa, it is not the individual who applies, but rather the company that wants to hire them. The visa is initially valid for three years and can usually be extended to six years. After that, the employee must either leave the country or have obtained permanent residency.

Why Silicon Valley depends on it

The major US technology companies employ a great many people who were not born in the United States. At Amazon, Google, Microsoft, and Meta, tens of thousands of H-1B applications are filed every year combined. A significant portion of the workforce in fields such as AI research or chip development operates on the basis of this visa. If the program were to disappear, these companies would lack personnel they cannot find in sufficient numbers domestically.

For investors, this is therefore not merely an administrative matter but a cost factor. When visas become scarcer or more expensive, companies shift teams abroad, for instance to Canada, India, or Poland. Stock prices rarely react directly to such news. But the long-term question of where research and development takes place depends noticeably on this.

Politically, the program has been controversial for years. Critics accuse companies of using H-1B to bring in cheaper labor and thereby suppress wages. Proponents counter that without the immigration of skilled workers, the US would lose its lead in software and AI. Both sides have studies supporting them, depending on which industry and time period one examines.

The lottery and its rules

The number of new H-1B visas is legally capped. There are 65,000 per year, plus an additional 20,000 for applicants with a US master’s degree. Universities and certain research institutions are exempt from this cap. But because far more applications come in than there are slots available, a lottery decides.

The process is the same every year. In spring, companies register their candidates with the US immigration authority. The authority then randomly draws as many registrations as there are open slots. Those who are drawn may submit the actual application, with evidence of degree, position, and salary. In some years, the chance of being selected fell below one in four.

A common misconception: the H-1B visa is not immigration in the true sense. It is tied to a specific employer. Anyone who changes companies needs a new approval. Anyone who loses their job has only a short window, usually 60 days, to find a new position. This dependency makes those affected particularly vulnerable during waves of layoffs.

H-1B in the news and quarterly earnings

In business news, the term usually comes up in three contexts. First, in legislative proposals: governments raise fees, change selection rules, or seek to raise the cap. Second, in mass layoffs in the tech sector, since thousands of visa holders then come under time pressure simultaneously. Third, in location decisions, when a company announces a new research center outside the United States.

Several individuals from the headlines also came to the United States through this visa. Multiple current CEOs of major technology companies got their start this way. This explains why the industry speaks up unusually loudly, politically, on this issue. For a company, a change in H-1B rules is not a minor matter but touches on the question of who will even be able to work for them in the future.