Chinese authorities have begun reviewing the overseas relocation and sale of AI startup Manus after the company moved operations to Singapore and was acquired by Meta for $2 billion, drawing scrutiny amid ongoing competition between the United States and China in artificial intelligence.
According to a report by the Financial Times, Manus co-founders Xiao Hong and Ji Yichao were summoned to meet with China’s National Development and Reform Commission. The founders were reportedly told they would not be allowed to leave the country during an inquiry into whether the deal violated foreign investment rules.
Startup Growth And Acquisition Timeline
Manus emerged in early 2025 with a demonstration of an AI agent capable of tasks such as screening job candidates, planning trips, and analyzing financial portfolios. The company said its system outperformed research tools from OpenAI.
The startup attracted investment from Benchmark, which led a $75 million funding round at a $500 million valuation. By December, Manus reported millions of users and more than $100 million in annual recurring revenue.
Meta later acquired the company for $2 billion as part of its broader investment in AI technologies.
Relocation And Ownership Changes
Before the acquisition, Manus had moved its headquarters and core team from Beijing to Singapore and restructured its ownership. Following the deal, Meta said it would sever ties with Manus’s Chinese investors and shut down its China operations.
These steps were seen as part of an effort to position the company outside China’s regulatory environment.
Regulatory Concerns In China
The case reflects ongoing concerns within China about domestic technology firms relocating abroad and transferring intellectual property and talent. Authorities have previously taken action against major companies over regulatory and governance issues.
The current inquiry into Manus has been described by officials as a routine review, and no formal charges have been announced.
Context Of Broader AI Competition
The review comes as both China and the United States increase investment in artificial intelligence development. Chinese policymakers have expanded funding for domestic AI initiatives while monitoring talent movement and corporate restructuring involving foreign entities.
The Manus case highlights how cross-border transactions in AI are drawing regulatory attention as governments assess their impact on technology development and national interests.
Featured image credits: Automated Marketer
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