The United States and China are currently engaged in an intense competition to develop the world's most advanced artificial intelligence. While Beijing is investing billions into domestic AI models and consolidating control over its tech sector, it also observes with concern the migration of its top AI talent towards U.S. companies. A Carnegie Endowment study from late last year indicated that 87 of the 100 leading Chinese AI researchers identified at U.S. institutions in 2019 remain there.
Amidst this dynamic, Manus, one of China's most discussed AI startups, quietly relocated its operations to Singapore and was subsequently acquired by Meta for $2 billion. This significant transaction inevitably sparked questions about its implications.
Manus quickly gained prominence in the spring of the previous year with a compelling demo video showcasing an AI agent capable of screening job candidates, planning vacations, and analyzing stock portfolios. The company boldly claimed its technology surpassed OpenAI's Deep Research. Within weeks, Benchmark, a prominent Silicon Valley venture capital firm, spearheaded a $75 million funding round, valuing Manus at $500 million, a move that raised eyebrows. Senator John Cornyn publicly voiced his concerns at the time, tweeting, "Who thinks it is a good idea for American investors to subsidize our biggest adversary in AI, only to have the CCP use that technology to challenge us economically and militarily? Not me."
By December, Manus had attracted millions of users and was generating over $100 million in annual recurring revenue. Its rapid success drew the attention of Meta, whose CEO Mark Zuckerberg has heavily bet the company's future on AI, leading to the swift $2 billion acquisition.
It is important to note that Manus's sale to an American entity was preceded by a deliberate year-long effort to operate independently of China's influence. The company moved its headquarters and core team from Beijing to Singapore, restructured its ownership, and following the Meta deal announcement, Meta committed to severing all ties with Manus's Chinese investors and entirely ceasing its operations within China. By all indications, Manus aspired to establish itself as a Singaporean company.
While these developments undoubtedly provoked scrutiny in Washington, Beijing's reaction was reportedly one of intense indignation.
China has a specific term for such occurrences: "selling young crops." This refers to homegrown AI companies that relocate abroad and sell themselves to foreign buyers before reaching full maturity, thereby transferring valuable intellectual property and talent out of the country.
Beijing strongly disapproves of this trend and has, for years, worked to ensure that no company operates beyond its jurisdiction. The widely publicized incident involving Jack Ma in 2020 serves as a stark reminder: after mildly criticizing Chinese regulators, he disappeared from public view for months, Ant Group's anticipated blockbuster IPO was abruptly halted, and Alibaba faced a $2.8 billion fine. China then spent the subsequent two years systematically dismantling its flourishing tech sector, erasing hundreds of billions in market value. Chinese leadership is known for many traits, but subtlety is not among them.
Given this history, it was not entirely unexpected when the Financial Times reported on Tuesday that Manus co-founders Xiao Hong and Ji Yichao were summoned to a meeting this month with China's National Development and Reform Commission and informed they would be restricted from leaving the country for an unspecified period. No formal charges have been filed; the inquiry focuses on whether the Meta acquisition violated Beijing's foreign investment regulations.
Beijing has publicly characterized this as a routine regulatory review.
At some point, individuals within Manus may have believed they had successfully navigated these complexities, and perhaps they still will. However, considering the high stakes of the global AI race, their actions represented a considerable gamble. Beijing now demands answers, and Manus's founders are reportedly unable to depart until these are provided.
The Editorial Staff at AIChief is a team of professional content writers with extensive experience in AI and marketing. Founded in 2025, AIChief has quickly grown into the largest free AI resource hub in the industry.