Microsoft's Smith Calls Vance's H-1B Fraud Claims 'Off Base'

Dublin, October 17, 2026 — He did it from a summit hallway, not a courtroom. Microsoft vice chair and president Brad Smith, buttonholed by POLITICO on the sidelines of the International AI Summit in Dublin, called Vice President JD Vance's accusation that Microsoft abuses the H-1B visa programme "completely off base" — and warned that shutting foreign workers out of green cards could cripple American technology for more than a generation. It was the most direct pushback yet from any American executive against the administration's immigration crackdown, and it landed with a sting: someone, Smith said, had simply failed to give the vice president the real numbers.

Less than a week earlier, Vance had announced that Microsoft and seven other employers would be barred from seeking green cards for skilled foreign workers while the administration investigated alleged visa fraud. The Labour Department followed through on October 8, suspending permanent labour certification — PERM — filings for all eight companies. PERM is the first step in most employer-sponsored green cards, so the move freezes a crucial stage of the residency path for thousands of workers, most of them Indian.

File photo: Microsoft vice chair and president Brad Smith. Photo: Web Summit via Wikimedia Commons (CC BY 2.0).

"Completely off base": the rebuttal

Vance didn't just announce a procedural freeze. He went after Microsoft by name, accusing it of using the H-1B programme to avoid hiring Americans at higher salaries — and of fraud. The numbers he cited, as reported by Reuters: Microsoft laid off roughly 6,000 American workers while holding about 6,300 H-1B visas and nearly 3,000 green cards. "You're a great American company, but you've got to hire great American workers," he said.

Smith's answer, delivered in Dublin, was blunt. Vance's fraud claims were "completely off base," he told POLITICO — "someone had failed to inform the vice president accurately about our numbers."

Then he laid out Microsoft's version of those numbers. The "vast majority" of the company's green-card applications, he said, are for long-time employees, not new arrivals — people stuck waiting because the permanent-residency backlog is so long. "Unfortunately, it's just because the green card backlog is so long," he said. Microsoft also hired more than 9,000 US-born workers last year, Smith added, arguing they had been "left out of the narrative."

Microsoft's own statement after the October 8 announcement filled in more detail, according to Reuters: roughly 80% of the company's H-1B filings in the previous fiscal year were for existing employees rather than new hires, and new employees who required visa sponsorship represented about 1% of its US workforce. And on the pay question — the allegation that foreign workers are brought in on the cheap — Smith insisted Microsoft's compensation system makes no distinction based on how someone entered the country.

The talent warning

Smith didn't stop at defending the paperwork. He went after the strategy. Asked about the crackdown, he warned that the United States risks signalling to the world's best young engineers that they should take their talents elsewhere. "I think we should all be worried about sending — intentionally or inadvertently or otherwise — signals that send the most talented next wave of AI [or] SI software engineers to other countries, rather than the United States," he said.

That line is doing real work. It reframes the debate from paperwork compliance to national competitiveness — the administration says it's protecting American workers; Microsoft says it's repelling the people who build America's technology edge. Smith warned the restrictions could damage the US tech sector for more than a generation.

The medal irony — and the 25% number

Then came the part of the interview that will travel the farthest. Smith pointed out that the White House went after Microsoft's foreign workers on the very same day it pinned a medal on the chest of Satya Nadella — Microsoft's India-born CEO and a former H-1B visa holder, who received the National Medal of Technology and Innovation in a ceremony at the White House. It's the same-day medal irony we covered when Trump froze Microsoft's green cards and medalled Nadella: the same-day medal irony we covered when Trump froze Microsoft's green cards and medalled Nadella.

Smith widened the point to the whole ceremony. "We should consider the fact that when the president honored six Americans with these technology and science medals, five of the six had come to the United States as immigrants," he said. The companies tied to those five individuals, he added, have a combined market value equal to more than 25% of the entire S&P 500. Then the closer: "Think about what those five individuals have done for the well-being, even the wealth and standard of living, of Americans across the country. Let's not put that at risk."

It's a rhetorical judo move — using the administration's own celebration of immigrant achievement as evidence against its immigration policy — and it's hard to argue with on the facts as stated. This is the escalating H-1B crackdown playing out in real time, with enforcement now colliding visibly with the administration's AI ambitions. It is difficult to champion AI supremacy on one hand — the administration recently launched Trump's AmericaGov AI portal as a flagship tech push — while kneecapping the talent pipeline on the other.

File photo: the Dublin waterfront on the River Liffey. Photo: Chris Morgan via Wikimedia Commons (CC BY-SA 2.0).

Who's frozen, and what happens next

The eight employers barred from new PERM filings are Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services (TCS), Wipro, HCL and Capgemini, according to the Economic Times and the Indian Express. Labour Secretary Keith Sonderling said the department would stop accepting new applications and stop processing pending labour certifications involving the eight firms.

To be precise about what this does and doesn't do: the action targets PERM, the first stage of an employer-sponsored green card. It does not cancel existing H-1B visas — affected workers can keep working in their current status. But workers approaching the six-year limit on H-1B status face a real problem, because extending an H-1B beyond six years usually requires a PERM or I-140 to have been filed at least 365 days earlier. A long freeze eats into that runway. None of the eight companies has been formally charged with fraud; the action was taken under a Labour Department rule on suspected fraud, and officials have alleged the employers ran job searches designed not to find Americans — allegations the companies dispute.

For the Indian IT majors on the list, the stakes are immediate: their business model depends on moving engineers to the US on H-1Bs and eventually converting the best of them to permanent residents.

Why Dublin matters

There's something fitting about where Smith chose to say all this. He wasn't in a Washington briefing room or on an earnings call. He was in Dublin, on the sidelines of the International AI Summit — a one-day gathering on October 14 at the RDS under Ireland's presidency of the EU Council that launched European AI Innovation Month — talking to POLITICO between keynotes. The interview was given on Wednesday and published Thursday.

We compared the IANS, ANI and Times of India accounts of the interview against each other and against the Irish government's summit records, and the core facts — the "off base" dismissal, the backlog explanation, the medal numbers — hold up identically in all three.

Our take: a botched case, badly made

Here's the uncomfortable part for the administration. Even if you grant the premise — that visa programmes get gamed, and they do — the way this was done looks botched.

Worse, the timing handed Smith the best possible counter. You cannot, on the same day, accuse a company's foreign workers of defrauding America and then hang a National Medal on the company's India-born former-H-1B CEO without looking like you don't know what your own immigration policy is for.

The deeper risk is the one Smith named in Dublin: this isn't about eight companies' paperwork. It's about whether the next generation of AI and software engineers — the people every country on earth is competing for — read the signals and pick Toronto, London or Bengaluru instead of Seattle.

Sources

This article is based on the POLITICO interview with Microsoft vice chair and president Brad Smith, conducted on the sidelines of the International AI Summit in Dublin and published October 16, 2026, as reported by the Times of India, the Indian Express, the Economic Times and the IANS wire. The October 8 PERM suspension and Microsoft's response figures are drawn from Reuters reporting via Black Enterprise, the Economic Times and the Indian Express. The summit's date, venue and theme were confirmed against official records from the Irish EU Council presidency.

Frequently Asked Questions

What did Brad Smith say to POLITICO about JD Vance's claims?
Smith called Vance's accusation that Microsoft abuses the H-1B programme "completely off base," said the vice president had been given inaccurate numbers, and argued the vast majority of Microsoft's green-card applications are for long-time employees stuck in the permanent-residency backlog.

Which companies are affected by the green-card suspension?
Eight employers were barred from new PERM filings on October 8: Microsoft, Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL and Capgemini. The Labour Department also stopped processing their pending labour certifications.

Does the PERM freeze cancel existing H-1B visas?
No. The suspension targets PERM — the first stage of an employer-sponsored green card — and does not affect existing H-1B status. But workers near the six-year H-1B limit face complications, because extending beyond six years generally requires a PERM or I-140 filed at least 365 days earlier.

What was the medal irony Smith pointed to?
Smith noted the White House targeted Microsoft's foreign workers on the same day it awarded the National Medal of Technology and Innovation to Microsoft CEO Satya Nadella, a former H-1B holder from India. He added that five of the six people honoured with science and technology medals that day came to the US as immigrants, tied to companies worth more than 25% of the entire S&P 500.

Where and when did Smith give the interview?
On the sidelines of the International AI Summit in Dublin, Ireland, on Wednesday October 14 — the one-day event at the RDS that launched European AI Innovation Month under Ireland's EU Council presidency. POLITICO published the interview on October 16.

By Daniel Rao. Daniel Rao covers US tech and AI policy for the TechPulse USA newsroom.