Hello, welcome to TechScape. I’m writing to you from a plane back to a United States in uproar. This week’s tech news is all about Donald Trump’s deals: with China, with the UK, and with the US tech industry, which is facing steep fines for its favorite visa.
Trump’s talent tariffs: Visa fines threaten tech’s most prized employees
US tech giants made a bargain last year: tens of millions of dollars to Trump’s presidential campaign in exchange for access to the president and policies that promoted their industry’s growth. If you count in Elon Musk, the number rises to hundreds of millions. However, Trump’s imposition of a new fee on a visa heavily used by tech threatens the compact.
My colleague Johana Bhuiyan reports:
Donald Trump signed a proclamation on Friday that would impose an annual $100,000 fee on H-1B visa applications, dealing a potentially major blow to the US tech industry, which relies more than any other sector of the US economy on immigrants who hold these visas.
Trump’s threat to crack down on H-1B visas has become a major flashpoint with the tech industry. Roughly two-thirds of jobs secured through the H-1B program are computer-related, government figures show, but employers also use the visa to bring in engineers, educators and healthcare workers.
After the initial report, Amazon, Microsoft and Google urged employees abroad to return to the US immediately and keep any dependents from traveling abroad. The consequences of the fee, which took effect at 12am on 21 September, were unclear, and their human resources departments were worried. The White House later clarified that the fee would only apply to new applicants, rather than burdening current visa holders with a yearly six-figure fee, and would not require $100,000 for reentry. The US commerce secretary had repeatedly said on camera the fee would be levied annually.
The penalty threatens one nation’s immigrants enormously: India. Roughly 700,000 H-1B visa holders reside in the United States. Of those, 71% were born in India. In a distant second, Chinese immigrants make up between 10% and 15%. Other notable facts: nearly three-quarters of H-1B visa holders are men, and their median salary is about $120,000. The price of bringing these workers to US soil, should the penalty withstand inevitable court challenges, may be too high for their employers.
‘Afraid of our talent’: India hits back against Trump’s H-1B visa fee hike
The fee amounts to a tariff on talent, much like the president’s duties on goods from nearly all the US’s trading partners. The president is directing his propensity for protectionism towards specialized jobs the same way he did imports from Vietnam. And like those tariffs on goods, the logic of his employee fees is difficult to compute: The US has not built up the domestic manufacturing capacity to assemble smartphones from case to camera, so it does not follow that the president erects barriers to bringing in parts made elsewhere. Likewise, the US does not boast the robust pipelines training technical workers that India and China do. The gap leaves the US’ most successful companies with a shortage of workers they need to create their products and provide their services. Enter the H-1B. Supporters of the program, including Tesla CEO Elon Musk, say it brings in highly skilled workers essential to filling talent gaps and keeping firms competitive. Musk, himself a naturalized US citizen born in South Africa, once held an H-1B visa.
In December of last year, Trump expressed his support for the program.
“I have many H-1B visas on my properties. I’ve been a believer in H-1B. I have used it many times. It’s a great program,” the president told the New York Post.
Will Trump’s talent tariff encourage the American education system to produce more students with technical skills, as he hopes to reshore technical manufacturing? Perhaps not while he wages war on the nation’s universities, which train many of the international students who go on to hold H-1B visas and fuel American companies.
Took long enough: Trump finally reaches a TikTok transfer deal
Will the TikTok deal go through? Photograph: Dado Ruvić/Reuters
After five years, one day of TikTok itself going dark, and three extensions of the enforcement deadline, Trump says he has reached a deal to transfer TikTok from its Beijing-based parent company to an owner the US finds acceptable.
“We have a deal on TikTok … We have a group of very big companies that want to buy it,” Trump said last Tuesday, without providing further details.
Since the initial vague announcement, we have learned some details. Trump said in an interview on Fox News on Sunday that media mogul Rupert Murdoch and his son Lachlan, the CEO of Fox Corporation could be part of deal. He said Michael Dell, the CEO of the computer maker Dell, was also involved.
Oracle, owned by the man who dethroned Elon Musk as the richest person in the world, Larry Ellison, will lease and maintain TikTok’s proprietary algorithm, White House officials said Monday. The partnership expands on Oracle’s existing management of TikTok’s trove of data collected about its American users.
The wider TechScape
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Hey, big spenders? Starmer and Trump’s multibillion-dollar tech deal dwarfed
Trump and Keir Starmer at Chequers, the country house of the prime minister, last week. Photograph: Evan Vucci/AP
Keir Starmer and Trump announced a week ago that a slew of US companies would invest £31bn in the UK’s tech sector over the next several years.
Microsoft’s president, Brad Smith, hailed the “single biggest announcement” in the pact, £22bn over the next four years, half of which will go towards capital expenditures on AI and cloud services. Google also pledged to invest £5bn.
CoreWeave, a US datacentre company, said it would invest a further £1.5bn in the UK including a site in North Lanarkshire, Scotland. The US software company Salesforce is investing an additional $2bn in the UK.
Nvidia, the world’s biggest AI chipmaker, touted an £11bn injection into the UK economy as part of the pact, providing up to 120,000 of its powerful Blackwell GPUs to projects that will be built over the next couple of years in the UK.
One notable critic lambasted the deal’s size as puny, dwarfed as it is by the US’s Project Stargate, in which commitments from tech companies amount to $500bn, or the joint US-UAE pledge to establish the world’s largest data center in Abu Dhabi. Governments need not even be involved for massive sums to change hands: Nvidia announced Monday that it would invest $100bn in OpenAI, more than three times the UK deal.
Nick Clegg, former UK deputy prime minister and Meta’s former chief policymaker, said the deal was “sloppy seconds” for the UK from the US tech industry.
Speaking at a Royal Television Society conference in Cambridge, Clegg said the relationship between the UK and the US tech sector was “all one-way traffic” and that the announcements suited the companies.
He warned Britain was being “defanged” by simply fostering a greater reliance on the US tech sector, rather than building its own.
“These companies need those infrastructure resources anyway,” he said. “They’re building datacentres all over the world. Maybe they were pushed a bit forward just to meet the timetable with this week’s state visit. But … it’s all one-way traffic.
“We’re a kind of vassal state technologically, we really are. The moment our companies, our tech companies, start developing any scale or ambition, they have to go to California, because we don’t have the growth capital here.
