Meta’s acquisition of Manus, a Chinese-origin artificial intelligence agent startup, has swiftly turned from celebration to complication.
The Chinese government has said it will review the estimated $2 billion deal announced on December 29 to assess whether it complies with the country’s export controls and technology transfer policies. Manus was founded in China in 2024, but moved its headquarters to Singapore months before its deal with Meta.
The scrutiny has turned what was being hailed as a global endorsement of Chinese startup talent into a sharp warning about how far founders can go in shedding their Chinese roots to secure Silicon Valley funding.
How Beijing handles the case will offer an early signal of how aggressively China intends to police the overseas flow of its AI technology and talent, at a time when the tech rivalry between China and the U.S. is intensifying.
“Manus left China to pursue international market opportunities just before they materialized,” Lian Jye Su, a Singapore-based tech analyst who monitors AI startups in the region at Omdia, told Rest of World. “Its exodus has left the impression that Chinese tech startups can only get international attention if they operate outside of China.”
Founded in China in 2024, Manus introduced itself as the world’s first general-purpose AI agent at a time when most consumers were using AI just as a chatbot. The company claims its tool can complete complex tasks, such as personalized research and travel bookings, independently.
Despite being founded by Chinese engineers and backed by Chinese investors, the company moved its headquarters to Singapore in June last year. Its product became unavailable in China in July. Around the same time, Manus reportedly laid off its Chinese staff and closed its offices in the country.
To be fair, Manus is not the only tech startup to have shifted to a foreign nominal domicile. Heavyweights like ByteDance and Shein have made this transition in the past.
The shift has been made mostly to navigate U.S.-China geopolitical tensions and regulatory crackdowns, and gain access to global funding and markets. Relocating outside China also gives companies access to advanced U.S. chips amid trade restrictions. Analysts and experts have termed the trend “Singapore washing.”
One of the primary reasons why tech startups make the move is that the U.S. has banned its companies from investing in sensitive technologies such as AI and semiconductors in China. This leaves Chinese startups with no option but to move elsewhere if they want funding from wealthy U.S. investors.
Benchmark, a Silicon Valley venture capital firm, is reportedly being looked into by the U.S. Treasury Department for its investment in Manus last year, before the company shifted its headquarters to Singapore.
“What Meta did is considered rare, hence it attracted so much attention,” Su said, adding that the reported $2 billion deal would be considered a “rather significant amount” for a Chinese tech startup.
Venture capital investment in Chinese AI startups has consistently declined since 2021, according to Pitchbook data published in November.
Meta and Manus have not responded to the Chinese government’s announcement.