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Were the most innovative people actually "lost" or did they just switch to something like the O1 Visa which isn't subject to quota, and highly innovative people should qualify for?

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O-1 is a useless visa. Nobody switches to it or uses it by choice. You only use it if you can't use H-1B.

I would guess that they found different ways to stay and work. I know that some companies send people to their office abroad (e.g., Canada or Europe) until there's a workaround by doing the green card process or applying H1B until it works out.

I did not end up using it, but I have personally "lost" the H1B lottery 3 times. I was also subject to the option above at some point.

Year of work in foreign office of a corporation enables transfer on L1 visa, common tactic in FAANG shops at one point

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