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Indian AI startups run into US visa hurdle
Aravind Jayendran, cofounder of agentic AI startup LatentForce, needs to be in the US within the next three months for key client meetings, but is struggling with the visa situation. Like many executives in the AI startup space, he is trying to figure out how to ensure a B1/B2 visa in time for the trip, as the appointment wait time ranges from three-and-a-half to nine months in India.
Siddhant Mohan, whose company Qodex focuses on API testing and security, has a B1/B2 visa but is now looking to apply for O-1, a specialty non-immigrant visa, as he is spending an average of close to six months a year in the US as his startup scales up. “We are seeing that getting O-1 is harder than before as denial rates have increased,” he said.
Indian AI startups, which are moving to the US in droves to be close to the epicentre of AI developments, are running into immigration issues as the Donald Trump administration tightens visa rules across categories, restricting access and increasing administrative burdens.
“As a startup, we are already facing multiple challenges and this is yet another that we need to deal with now,” Jayendran said.
Several startup founders and investors ET spoke with said it is crucial for them to be physically present in the US since it is a key—often the largest—market for them. Immigration challenges under the Trump administration will likely impact their business and they are also recalibrating their hiring strategy, founders and investors said.
In the past year, multiple Indian founders, from companies like Composio, Smallest.ai and Atomicwork, moved to the US in order to be closer to their largest customer base and tap into the talent ecosystem as generative AI grows at a rapid pace. The US is also where the largest amount of venture capital investments is going into AI startups.
It is vital for these companies to be in the US, investors told ET.
“There is a limit as to how much we can do online. For example, we have met all our customers in person and then closed the deal. If you cannot do that, it makes you handicapped as you are not getting sales,” LatentForce's Jayendran said.
ETtech
Changes under Trump II
A Bengaluru-based investor told ET that getting a visa is now a huge hurdle, whether it is B1/B2 for business and leisure or the O-1 specialty occupation visa, which is for people with extraordinary ability in areas such as science, arts, or business. For many Indian founders, O-1 is a preferred route for migrating to the US to set up shop.
The number of Indians applying for O-1 visas has seen a significant rise in the last three years. While the number of visa approvals has increased to 1,375 in FY24 from 210 in 2018, the denial rate has been on the rise, too. According to data from the US Citizenship and Immigration Services, overall the denial rate of O-1 has increased from 4.5% in FY23 to 5.8% in FY24.
Joel Yanovich, attorney at Murthy Law Firm, said he has started to see stricter scrutiny of O-1 cases, which is causing delays.
Some founders who were exploring countries like Vietnam and Thailand to apply for a US visa, will now have to recalibrate. A founder, who was looking at multiple options including overseas said, that that option is no longer available, as the US Department of State said people can apply only from the country they are a resident or citizen of.
Shift in hiring
With visas becoming an issue, companies are also looking to change their hiring strategy.
Himanshu Tyagi, cofounder of Sentient Labs which has set up a research and development centre in San Francisco, said most of the people his company hires in the US are PhD researchers. While they are not all from India, this is a concern. “We are seeing that the researchers might run into visa issues within months of hiring. The Optional Practical Training (OPT) clause, which allowed fresh graduates to work in the US till they moved to a work visa category, is facing potential elimination,” he said.
Earlier OPT allowed students on an F-1 student visa to stay in the country for two years, giving them time to apply for H-1B. This rule is now facing elimination under Trump.
Also Read: H-1B aspirants brace for longer waits, denials
“But there is no alternative to hiring PhD candidates because AI is a space that is hyper focused on research. The only other option is to hire local talent, which is extremely expensive, and we cannot even wait since time is of essence when it comes to AI,” he said.
With the Trump administration looking to increase the wage criteria for employment visas, Mohan, who was cited earlier, said his company is recalibrating its US hiring strategy. While the company will hire local talent for business development roles, it is not looking to hire fresh engineering graduates in the US (often Indian students after completing education in the US). “We will be hiring more engineers in our offices in India instead of the US,” he said.
Source: EconomicTimes
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