Meta’s acquisition of Manus, an artificial intelligence agent startup of Chinese origin, quickly moved from celebration to complication.
Chinese government says it will review estimates $2 billion deal announced on December 29 to assess its compliance with the country’s export controls and technology transfer policies. Manus was founded in China in 2024, but moved its headquarters to Singapore a few months before its deal with Meta.
The scrutiny has transformed what was hailed as global recognition of the talents of Chinese startups in a stark warning about how far founders can go to shed their Chinese roots in order to secure funding in Silicon Valley.
How Beijing handles this matter will be an early signal of how aggressively China intends to control the overseas flow of its AI technology and talent, at a time when technological rivalry between China and the United States is intensifying.
“Manus left China to seize international market opportunities just before they materialized,” said Lian Jye Su, a Singapore-based technology analyst who monitors AI startups in the region at Omdia. Rest of the world. “His exodus has given the impression that Chinese tech startups can only attract international attention if they operate outside of China. »
Founded in China in 2024, Manus billed itself as the world’s first general-purpose AI agent at a time when most consumers used AI solely as a chatbot. THE company complaints its tool can perform complex tasks, such as personalized searches and travel bookings, independently.
Although it was 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 isn’t the only tech startup to have moved to a foreign nominal home. Heavyweights like ByteDance and Shein have made this transition in the past.
This change was made primarily to address geopolitical tensions and regulatory crackdown between the United States and China, and to access global financing and markets. Offshoring out of China also gives companies access to advanced U.S. chips amid trade restrictions. Analysts and experts have called this trend “Washing in Singapore.”
One of the main reasons why tech startups are making the move is that the United States has prohibits its companies from investing in sensitive technologies such as AI and semiconductors in China. That leaves Chinese startups with no choice but to move elsewhere if they want to secure funding from wealthy American investors.
Benchmark, a Silicon Valley venture capital firm, is said to being examined by the US Treasury Department for its investment in Manus last year, before the company moved its headquarters to Singapore.
“What Meta did is considered rare, that’s why it attracted a lot of attention,” Su said, adding that the $2 billion deal would be considered a “rather large amount” for a Chinese tech startup.
Venture capital investment in Chinese AI startups has steadily declined since 2021, Pitchbook data shows published in November.
Meta and Manus did not respond to the Chinese government’s announcement.