Manus's Bold Move: How a Chinese AI Startup Triggered Beijing's Wrath After Selling to Meta

The competition between the United States and China for dominance in Artificial Intelligence is intensifying, with China investing billions in the development of its own AI models. This situation has put Chinese AI companies at a crossroads, especially those with talent in the United States. A Carnegie Endowment study revealed that the majority of Chinese AI researchers at US institutions in 2019 are still there. Against this backdrop, the Chinese startup Manus, which had generated much buzz in the sector, made a bold decision: it moved its headquarters to Singapore and sold itself to Meta for $2 billion, a move that did not go unnoticed by the Chinese authorities.

Manus, known for its AI agent that demonstrated the ability to screen job candidates, plan vacations, and analyze stock portfolios, attracted the attention of Silicon Valley investors, such as Benchmark, who led a $75 million funding round. After initial success, Meta acquired the company for $2 billion. However, what most caught attention was Manus's effort to operate outside the Chinese orbit, relocating its headquarters and core team to Singapore, restructuring its ownership, and pledging to cut ties with Chinese investors after the deal with Meta. This set of actions, which sought to turn Manus into a Singaporean company, generated strong reactions in Beijing.

China's reaction to Manus's sale to Meta and its attempt to operate outside its control has been forceful. Beijing, which has the phrase 'selling young crops' to refer to AI companies that sell to foreign buyers, summoned Manus's co-founders, Xiao Hong and Ji Yichao, to a meeting with China's National Development and Reform Commission, informing them that they would not be able to leave the country for a while. Although no formal charges have been filed, it is investigating whether the deal with Meta violated Beijing's foreign investment regulations. This situation highlights China's firmness in maintaining control over its AI companies and their technology, in a context of growing technological and geopolitical rivalry.