Those lucky enough to stay off X during the holidays missed an ugly battle that, despite its absurdity, still seems portentous of the emerging cracks in Trump world. Without getting too deep into the weeds, the skirmish began when alt-right meme accounts and conspiracy theorist/activist Laura Loomer took issue with Trump’s appointment of Sriram Krishnan, a former general partner at Andreessen Horowitz, to a White House artificial intelligence policy position.

Krishnan is from India, and although other new Trump acolytes such as Elon Musk and David Sacks are foreign-born, Krishnan’s pick drew an overtly racist outcry from supporters who took Trump’s anti-immigration rhetoric at face value. The VC class immediately rushed to Krishnan’s aid, fighting online against an often anonymous, yet foundational, element of the Trump bloc.

Trump won in November partly by courting right-leaning Silicon Valley figures like Musk, who were willing to parrot his talking points about migrants but don’t exactly share his “America first” ideology, at least when it comes to their own economic interests. A fault line was almost certain to appear. Or, as one crypto VC put it on X, “Trump’s rainbow coalition of tech bros and blood and soil nationalists appears to have collapsed 25 days before he takes office.”

The episode may be remembered for creating an early contender for the most inane moment of Trump’s second term—Vivek Ramaswamy declaring that the U.S. is suffering because of the cultural impact of Boy Meets World—but it also sparked a revealing debate over skilled visa programs.

Tech companies are one of the main beneficiaries of the H-1B visa program, which allows U.S. employers to hire foreign workers in specialty occupations like engineering, medicine, and education. According to government data, Amazon was the top beneficiary in 2024 with nearly 10,000 H-1B holders, with Google, Meta, Microsoft, and Apple all in the top 10 and Tesla ranked number 22.

On the surface, the program helps attract some of the world’s best and brightest minds to the U.S., creating a pathway for companies to sponsor promising employees. I’m sure nearly every reader of this newsletter has worked alongside or hired an H-1B worker who easily justified the program’s existence.

But it has also created constant frustrations—and worse—for its recipients who have to navigate an often cruel system that ties their immigration status to the whims of their employers, who can abuse its design to build a cheaper, and more captive, workforce. A 2013 investigation by Boston Globe reporter Farah Stockman found that companies fired U.S. workers and replaced them with H-1B holders receiving far lower salaries and no benefits. On Friday, Stockman wrote an opinion piece for the New York Times arguing that the H-1B program “worsens the very shortages that it was supposed to address.”

With Trump still two weeks away from his second term, the true state of his capricious allegiances remains an enigma. But in this debate, he seemed to side with his tech backers, voicing support for the H-1B program and saying that the U.S. needs “smart people” coming into the country. In contrast, Vermont senator and progressive Bernie Sanders posted on X that the H-1B program allows billionaires to hire cheaper labor, later calling for reforms that would raise the salary floor. It’s a view that many Trump supporters might find themselves agreeing with.

How long will Trump’s fragile tech alliance last?

Scooplet…According to an SEC filing on Thursday, the New York-based Reciprocal Ventures is targeting $100 million for its third fund. Reciprocal is led by Michael Steinberg, who was found guilty of insider trading at Steve Cohen’s SAC Capital but had his conviction dropped. The firm focuses on blockchain technology, including a recent investment in the exchange TrueX. Steinberg declined to comment on the specifics of the raise but told Fortune, “For the first time in the history of this technology, we have an administration that plans to support its growth. The timing is ideal—and we are extremely well-positioned to capitalize on this positive catalyst.”

Leo Schwartz
Twitter: @leomschwartz
Email: leo.schwartz@fortune.com
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VENTURE DEALS

- Jentic, a Dublin, Ireland-based AI startup, raised €4 million ($4.1 million) in pre-seed funding. Elkstone led the round and was joined by Sure Valley Ventures, TechOperators, and Shuttle.

- StruxHub, a San Francisco-based construction operations platform, raised $4 million in seed funding. Brick and Mortar Ventures led the round and was joined by FJ Labs, Holcim, and angel investors.

PRIVATE EQUITY

- Later, backed by Summit Partners, acquired Mavely, a Chicago, Ill.-based shopping influencer platform, for $250 million.

- Coalesce Capital performed a majority recapitalization of Pearl Meyer & Partners, a Wellesley, Mass.-based independent advisor to boards and senior management. Financial terms were not disclosed.

- Morgan Stanley Capital Partners acquired Prescott’s, a Monument, Colo.-based provider of medical equipment repair and maintenance services. Financial terms were not disclosed.

- Waste Eliminator, backed by Allied Industrial Partners, acquired Enterprise Landfill and Phillips Recoveries, a Pelzer, S.C.-based environmental contractor. Financial terms were not disclosed.

PEOPLE

- BoxGroup, a New York City and San Francisco-based venture capital firm, promoted Adina Davis, Claire Smilow, and Jeff Silverstein to Partner as well as Claire Goldsmith to Principal.

An ugly debate over immigration reveals cracks in the fragile Trump coalition