Visa Obstacles Challenge Indian AI Startups Seeking U.S. Expansion
Aravind Jayendran, the visionary cofounder of LatentForce, a rising agentic AI startup, finds himself in a quandary as he seeks to secure his presence in the United States within the next three months for critical client discussions. The complexity of obtaining a B1/B2 visa looms large, with wait times in India stretching from a daunting three-and-a-half to nine months.
Similarly, Siddhant Mohan, of the API testing and security firm Qodex, is contemplating an application for the O-1 visa, a non-immigrant category reserved for individuals of extraordinary ability, after already securing a B1/B2 visa.
He now spends approximately six months annually in the U.S. as his enterprise flourishes. “Navigating the O-1 application has become increasingly arduous,” he observed, noting a surge in denial rates.
Numerous Indian AI startups are migrating en masse to the U.S., drawn by its central role in AI innovation. However, they face formidable immigration challenges exacerbated by the stringent visa policies instituted during the Trump administration, which have heightened barriers and bureaucratic complexities.
“As a startup, we already navigate a plethora of challenges; this is yet another hurdle,” Jayendran remarked, encapsulating the frustration echoed by countless entrepreneurs in the sector.
Founders and investors interviewed emphasize the critical need for physical presence in the U.S., a crucial market that often serves as their primary customer base. The ramifications of immigration obstacles threaten not just business operations but also compel a reevaluation of hiring practices.
In the past year alone, several Indian entrepreneurs from companies such as Composio, Smallest.ai, and Atomicwork have relocated to the U.S. to gain proximity to their largest clients and tap into a burgeoning talent pool as generative AI proliferates.
The U.S. also remains the preeminent destination for venture capital investments in AI.
“There is a constraint on what can be achieved remotely. For instance, all our customer engagements have occurred in person, facilitating deal closures. Without that, we find ourselves incapacitated in driving sales,” lamented Jayendran.
Changes Under Trump’s Administration
A Bengaluru investor relayed that the process of acquiring a visa has evolved into a substantial obstacle, whether it be the B1/B2 for business and leisure or the O-1 visa tailored for those exhibiting extraordinary capabilities in fields such as science, arts, or business.
For many aspiring Indian founders, the O-1 visa represents a desirable avenue for establishing a foothold in the U.S.
There has been a notable surge in O-1 visa applications from Indian nationals over the past three years, with approvals escalating from a modest 210 in 2018 to 1,375 in FY24. Unfortunately, this surge comes hand-in-hand with heightened denial rates.
Data from the U.S. Citizenship and Immigration Services indicates that the denial rate for O-1 applications increased from 4.5% in FY23 to 5.8% in FY24.
Joel Yanovich, an attorney at Murthy Law Firm, has observed intensified scrutiny regarding O-1 applications, resulting in significant delays.
Moreover, some founders contemplating alternative destinations such as Vietnam or Thailand for their visa applications must now reconsider their strategies. A founder who had once explored these options expressed dismay after the U.S. Department of State clarified that applications can only be made from a candidate’s country of citizenship or residency.
Adapting Hiring Strategies
In light of the mounting visa challenges, companies are reevaluating their hiring methodologies.
Himanshu Tyagi, cofounder of Sentient Labs, which has inaugurated a research and development center in San Francisco, indicated that most of their hires in the U.S. comprise PhD-level researchers. Although not all hail from India, concerns loom.
“We are encountering potential visa issues with our new researchers within mere months of hiring. The Optional Practical Training (OPT) provision, which enabled recent graduates to work in the U.S. until transitioning to a work visa, faces possible abolition,” he cautioned.
The OPT previously allowed F-1 student visa holders to remain in the U.S. for an extended two-year period while facilitating the transition to H-1B status. This provision now teeters on the brink of repeal.
“Despite these complications, hiring PhD candidates remains imperative, as AI demands a substantial research focus. If local talent must be sourced, it entails significant costs, and time is a critical factor in this fast-paced industry,” Tyagi concluded.
With the Trump administration’s intent to heighten wage criteria for employment visas, Mohan has attuned his company’s hiring approach accordingly, favoring local talent for business development roles while opting to recruit engineers predominantly within India.
Source link: M.economictimes.com.
