H-1B Visa Changes Spark US-India Tech Tensions, 280 Billion Dollar Sector at Risk NVIDIA Invests 1000 Billion Dollars in OpenAI for AI Data Centers Federal Reserve Governor Calls for Significant Rate Cuts to Protect Labor Market

Tensions between the United States and India have escalated due to new regulations on H-1B visas, which are expected to significantly impact the tech industry and strain diplomatic relations. The new rules require applicants to pay 100 million dollars, primarily affecting Indian applicants who make up over 70% of H-1B visa holders. This move threatens the 280 billion dollar tech services sector in India and its outsourcing model, putting thousands of jobs at risk.

This latest development follows a series of trade disputes, including a 50% tariff on Indian goods imported to the U.S. in August, which marked a departure from decades of diplomatic tradition between the two nations. While recent efforts to restart trade talks and a personal call from President Trump to Indian Prime Minister Modi on his birthday had indicated a potential thaw in relations, the new visa regulations have cast doubt on this progress.

Experts have criticized the new rules, describing them as a non-tariff barrier aimed at excluding Indian professionals and further straining bilateral relations. The move is seen as a significant blow to the already fragile relationship between the two countries, which has been under pressure due to various trade and diplomatic issues.

In other news, NVIDIA has announced plans to invest 1000 billion dollars in OpenAI, an artificial intelligence research laboratory. The investment will support OpenAI's efforts to build data centers powered by NVIDIA's AI processors. The collaboration aims to create systems requiring 10 gigawatts of power, a measure increasingly used to describe the largest AI chip clusters. NVIDIA's CEO highlighted the scale of the project, noting that it involves a number of GPUs equivalent to the company's total output for the year, doubling last year's production.

Meanwhile, the Federal Reserve Governor has expressed concerns about high interest rates, emphasizing the need for significant rate cuts in the coming months to protect the labor market. The governor, who was appointed by President Trump, argued that the neutral interest rate has been overestimated due to factors such as tariffs, immigration restrictions, and tax policies. This suggests that interest rates need to be lowered to prevent economic damage.

The governor's remarks come as part of a broader discussion on monetary policy, highlighting the risks of maintaining high interest rates, which could lead to unnecessary job losses and increased unemployment. The governor's comments underscore the delicate balance that central banks must strike between stimulating economic growth and avoiding inflation.