Jason’s H-1B pitch, the latest on the TikTok deal, and Howie’s first ad | E2182
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode of "This Week in Startups" covers the Trump administration's significant changes to the H-1B visa system and major tech developments affecting startups and innovation. (09:04) Jason and Lon discuss President Trump's implementation of a $100,000 fee for H-1B visas, representing a dramatic shift from Jason's previously proposed $20,000 annual fee structure. The conversation explores how this policy change will force American companies to invest in domestic training programs rather than relying on cheaper foreign labor. (37:54) They also analyze the emerging TikTok acquisition deal featuring a consortium of Trump allies including the Murdochs, Larry Ellison, and Marc Andreessen, examining the competitive implications for Meta's dominance in social media.
- Main Theme: Policy changes in immigration and tech regulation are reshaping the startup ecosystem, creating both challenges and opportunities for American companies to develop domestic talent and compete globally.
Speakers
Jason Calacanis
Host of "This Week in Startups" and founder of Launch Fund, Jason is a seasoned venture capitalist and entrepreneur with deep experience in corporate IT and startup investing. He has been advocating for H-1B visa reform for over a decade, appearing regularly on CNBC to discuss immigration and business policy. Jason has personal connections within the Trump administration and has been influential in policy discussions around high-skilled immigration.
Lon Harris
Editorial Director of "This Week in Startups," Lon brings extensive experience in startup journalism and media production. He provides research support and analysis for complex tech policy issues, helping to contextualize regulatory changes and their impact on the startup ecosystem.
Key Takeaways
H-1B Reform Creates Training Opportunities
The $100,000 H-1B fee will force companies to invest in American worker training rather than relying on cheap foreign labor. (11:48) Jason explains that when he worked in corporate IT, companies consistently chose H-1B workers because they could pay them 25-50% less while having leverage over their immigration status. The high fee will make this cost arbitrage unsustainable, compelling companies to create robust training programs similar to what existed decades ago. Companies like JPMorgan have already stated that the fee "prices out the utility of H-1B's as a source of labor supply," which achieves exactly the intended policy goal.
Auction System Could Maximize Revenue and Efficiency
Beyond the fixed fee, implementing an auction system for H-1B visas would optimize allocation to companies that truly need specialized talent. (13:00) Jason proposes that companies like OpenAI, Grok, and DeepMind should bid competitively for batches of visas, potentially paying $250,000 each if they genuinely require unique skills. This market-based approach would generate substantial government revenue while ensuring visas go to legitimate high-skilled positions rather than being used as a cost-cutting measure for routine jobs.
Small Companies Need Different Treatment
Startups under 100 employees should receive preferential access to H-1B visas at lower costs to maintain competitiveness. (15:15) Jason suggests small companies should get one H-1B visa for around $10,000, recognizing that early-stage companies often need specific expertise but lack the resources of larger corporations. This tiered approach would prevent the reform from inadvertently harming innovation in the startup ecosystem while still addressing abuse by large corporations.
Diversified Ownership Prevents Content Control Concerns
The TikTok acquisition by a consortium rather than a single entity addresses concerns about content manipulation and bias. (38:00) Unlike Meta where Zuckerberg maintains super-voting shares and eternal control, the TikTok deal involves dozens of investors including existing stakeholders like Jeff Yass and Brad Gerstner. This distributed ownership structure, combined with plans to float shares publicly, creates natural checks and balances that prevent any single entity from controlling the platform's content or policies.
European Compute Advantage Through Energy Policy
Nordic countries are becoming AI powerhouses due to strategic energy policies that provide 60-90% cheaper electricity than other European regions. (40:09) The combination of abundant hydroelectric power, geothermal energy, cooler climates for natural cooling, and ample land availability makes Scandinavia increasingly attractive for data centers. This creates a virtuous cycle where proximity to compute resources fosters local AI innovation, similar to how Silicon Valley benefits from clustering effects.
Statistics & Facts
- Data center power demand in Nordic countries is expected to increase by 4x by 2032, potentially accounting for 6-9% of total Scandinavian power consumption. (39:45) This massive increase is driven by major players like Alphabet, Microsoft, and Meta expanding their footprints to take advantage of significantly lower energy costs.
- Power costs in Nordic countries average 60% cheaper than the rest of Europe, with some areas of Norway and Sweden offering electricity that is 90% cheaper. (40:09) This dramatic cost difference is making Scandinavia the preferred location for energy-intensive AI compute operations.
- The new H-1B fee represents approximately 6 times the previous cost, with JPMorgan stating it "prices out the utility of H-1B's as a source of labor supply." (09:54) This significant increase is designed to eliminate the cost arbitrage that made H-1B abuse attractive to corporations.
