What's next for H-1B visas and a long-awaited TikTok deal

Hello from Yifan in California, your #techasia host this week.

Silicon Valley has been in absolute chaos since last Friday, when U.S. President Donald Trump signed a proclamation to put a hefty $100,000 fee on H-1B visa. The move sent immigrants and companies alike into panic mode.

Tech firms including Microsoft and Amazon sent out urgent memos to employees, advising any of them outside of the country to return before a deadline of 12:01 a.m. U.S. Eastern Time on Sept. 21 and telling those already here not to leave.

A friend of mine at TikTok was just about to board her plane to Bangkok when she saw the news. She had to cancel the trip, leaving her $4,000 out of pocket.

But she was one of the lucky ones. Reports have flooded social media of H-1B workers spending tens of thousands of dollars to book last-minute return flights, leaving a friend's wedding after just arriving, or being forced to choose between returning to the U.S. before the deadline or leaving a loved one on their death bed.

And it is not just the personal lives of some immigrants being upended. The entire U.S. tech ecosystem, which has relied on high-skill immigrants for decades, is also being disrupted.

From venture capitalists to AI scientists to software engineers at tech companies big or small, almost every part of Silicon Valley has foreign workers on H-1B visas supporting it.

In fiscal 2025, Amazon received 14,667 approved H-1B petitions, followed by Microsoft with 5,189, Meta at 5,123 and Apple's 4,202. And the list goes on.

That is probably why California Attorney General Rob Bonta said in an interview on Wednesday that the new fee creates "uncertainty and unpredictability" for businesses and will have an "adverse impact" on California. The state "will assess whether there's a legal violation," he added.

Trump's stance on the legal immigration of highly skilled workers does not come as a surprise to me. Soon after he was elected last year, I reported that some in Silicon Valley were hoping he would focus on targeting illegal immigration and that tech billionaire supporters such as Elon Musk would convince him to support H-1B and similar visa programs. But Trump's cabinet picks foreshadowed the hard-line immigration policies that were to come.

But it's not all bad news.

At Nikkei Asia, we have been following the flow of international students and high-skill workers in the U.S. for years. It turns out a lot of countries are opening their arms to this talent pool, especially in Asia.

It makes sense. After all, more than 70% of H-1B workers are from India, followed by 12% from China.

As the AI race continues to heat up, we might see some new tech powers emerging in the region, thanks partly to Trump's $100,000 fee.

A deal at last

The U.S. operations of TikTok will be moved from Chinese owner ByteDance to a new American-owned joint venture with Oracle and private equity firm Silver Lake among its owners, Nikkei Asia's Ken Moriyasu reports.

President Trump is set to sign an executive order on Thursday that declares the deal hammered out by his administration will meet the requirements of the "sell-or-ban law" passed last year.

As Nikkei Asia previously reported, who owns the algorithm that makes TikTok so addictive to its 170 million American users was the key issue hindering a potential spinoff of its U.S. operations.

Now, the years-long saga looks like it will finally come to an end after Beijing and Washington reached a consensus on the issue earlier this month.

The deal will see a copy of ByteDance's current algorithm brought into the joint venture, to be fully inspected and retrained on U.S. user data by Oracle as the security provider.

The 'Stargate of China'

Beijing is consolidating scarce artificial intelligence chips into "mega-clusters" in strategically chosen cities to meet surging demand, write the Financial Times' Eleanor Olcott, Nian Liu and Chris Cook.

In Wuhu, an agricultural hub near Nanjing and Shanghai, a cluster of new data centers has emerged to serve booming demand for AI applications. The building work is an effort to "build the Stargate of China," said an executive at a supplier for one of the projects, referring to the $500 billion plan by OpenAI, Oracle and SoftBank to build the world's largest AI data center in Texas.

Previously, Beijing directed companies to build centers in China's remote western provinces, taking advantage of cheap electricity for energy-intensive model training.

But as AI use has accelerated this year -- particularly after the release of DeepSeek's popular R1 model in January -- demand has shifted from training to inference, the process by which chatbots and other tools generate responses. Inference requires proximity to users to deliver faster, more efficient applications.

This has led Beijing to organize the construction of new facilities closer to China's population-dense eastern coast. The greater coordination reflects an effort to maximize economic returns from limited computing power and offset disadvantages against the U.S. Washington's export controls have blocked Chinese firms from accessing Nvidia's most advanced chips, forcing them to rely on weaker domestic alternatives or gray-market supplies.

More partnerships

News of Nvidia's partnership with OpenAI and Intel has dominated the headlines in the past few weeks, but they are not the only tech players looking to team up.

Taiwan's MediaTek, the world's largest mobile chip developer by shipments, is in talks with the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), to produce some of its chips in Arizona, Nikkei Asia's Cheng Ting-Fang reports.

Top global chip makers Nvidia, Apple and AMD have already committed to building chips with TSMC in the U.S.

MediaTek is the world's fifth-largest chip developer by revenue and the biggest headquartered outside the U.S. It counts Amazon, Google, Cisco, Samsung, Xiaomi, Oppo and Vivo as key clients. But it is facing some headwinds as overall economic conditions are uncertain and the smartphone market is expected to achieve only mild growth this year and next.

A blow for India

Silicon Valley is not the only one hit by President Trump's new H-1B policies.

Indian information technology stocks were deep in the red and the rupee slightly weaker in early trading on Monday as investors digested the potential impact for tech companies of a hefty new fee on U.S. visas for highly skilled workers, Nikkei Asia's Soumyajit Saha, Kiran Sharma and Sayan Chakraborty report.

Trump's imposition of a $100,000 fee on new H-1B visa applications on Friday is set to hurt India's IT services sector, which deploys thousands of workers on-site in the U.S. to help clients with projects. Almost three-fourths of these visas went to Indian nationals last year.

The move may force companies to increase local hiring and subcontracting, or do a larger share of work offshore, economists and analysts said. The shift may also impact big tech companies like Amazon, Google and Microsoft, which often rotate workers between their expanding global capability centers (GCCs) in India and their U.S. offices.