U.S.-China AI Race Intensifies as Manus Shifts to Singapore
The competition between the U.S. and China to dominate the artificial intelligence landscape has reached a fever pitch. China is investing heavily in its homegrown AI models while tightening its grip on the tech sector. Meanwhile, the exodus of top AI talent to U.S. companies raises concerns in Beijing. In a striking development, Manus, one of China’s most talked-about AI startups, has relocated to Singapore and sold itself to Meta for $2 billion.
A Controversial Acquisition Draws Attention
Manus made headlines last year with a demonstration video showcasing an AI agent capable of screening job candidates, organizing vacations, and analyzing stock portfolios. The startup boldly claimed to outperform OpenAI’s Deep Research. Shortly thereafter, Benchmark, a prominent Silicon Valley venture firm, led a $75 million funding round, valuing Manus at $500 million. This prompted skepticism from U.S. lawmakers, including Senator John Cornyn, who questioned the wisdom of American investors supporting an adversary in AI.
Rapid Growth Before the Meta Deal
By December, Manus had amassed millions of users and generated over $100 million in annual recurring revenue. Its impressive performance caught the attention of Meta, where Mark Zuckerberg, who has bet the company’s future on AI, acquired Manus for $2 billion—a move that sent shockwaves through the industry.
Strategic Relocation and Restructuring
Notably, Manus actively sought to distance itself from China’s influence throughout the past year. The company not only relocated its headquarters from Beijing to Singapore but also restructured its ownership. Following the acquisition, Meta announced its intent to sever all ties with Manus’s Chinese investors and cease operations in China entirely, effectively establishing the startup as a Singaporean entity.
Beijing’s Discontent and Regulatory Actions
The series of events has undoubtedly raised eyebrows in Washington, but the response in Beijing has been far more severe. Chinese authorities have a term for such cases: “selling young crops,” referring to homegrown AI companies that migrate abroad and sell to foreign buyers before fully maturing, taking their intellectual property and talent with them. This is a scenario Beijing has long sought to prevent.
Historical Context of Beijing’s Stance
Beijing’s commitment to retaining control over its tech companies is underscored by its past actions. Recall the 2020 incident involving Jack Ma, whose mild criticism of regulators led to his temporary disappearance and the abrupt cancellation of Ant Group’s IPO. In the subsequent years, China methodically dismantled its own thriving tech sector, leading to substantial market value loss. The Chinese government is known for its decisiveness, and this situation is no exception.
Inquiry into Manus’s Acquisition
As reported by the Financial Times, the co-founders of Manus, Xiao Hong and Ji Yichao, were recently summoned for discussions with China’s National Development and Reform Commission. During the meeting, they were informed that their international travel would be restricted while an inquiry into the Meta acquisition is conducted to assess compliance with Beijing’s foreign investment regulations.
The Stakes of the AI Race
Beijing has characterized the situation as a routine regulatory review, but the implications are significant. While Manus founders may have hoped to evade repercussions, the high stakes of the AI race render such optimism a gamble. With Beijing demanding answers, it seems that the founders will remain in the country until further clarification is provided.