The most predictable phase of the Manus story is unfolding now

The ongoing global contest between the U.S. and China to develop the most advanced artificial intelligence systems has intensified. China continues to invest heavily in domestic AI capabilities, tightening regulatory control while also grappling with the challenge of top talent moving toward U.S.-based companies. Against this backdrop, Manus — one of China's most talked-about AI firms — quietly shifted its base to Singapore and agreed to a $2 billion acquisition by Meta.

Given the geopolitical and technological implications, it was widely expected that such a move would eventually draw scrutiny.

Manus first gained widespread attention in the spring of the previous year after releasing a demonstration showcasing an AI agent capable of screening job applicants, organising travel plans, and analysing investment portfolios. The company even claimed its system outperformed OpenAI's Deep Research. Shortly after, Silicon Valley venture firm Benchmark led a $75 million funding round, valuing the startup at $500 million — a development that raised questions in political circles. U.S. Senator John Cornyn publicly criticised the investment, questioning whether American capital should support a strategic rival in AI.

By December, Manus had rapidly scaled, reaching millions of users and generating over $100 million in annual recurring revenue. Soon after, Meta — under CEO Mark Zuckerberg — acquired the company for $2 billion, reinforcing its broader push into artificial intelligence.

Notably, Manus had already been taking deliberate steps to distance itself from China before the acquisition. The company moved its headquarters and core operations from Beijing to Singapore, restructured ownership, and, following the deal, Meta committed to severing ties with Chinese investors and shutting down Manus's operations within China. These actions were widely interpreted as an effort to position Manus as an international, rather than Chinese, entity.

However, while these developments attracted attention in Washington, they appear to have triggered far stronger reactions in Beijing.

In China, there is a term often used in such situations — "selling young crops" — referring to domestic companies that relocate abroad and sell themselves to foreign entities before reaching full maturity, effectively transferring intellectual property and talent out of the country. Authorities have long been wary of such moves and have consistently demonstrated that companies remain subject to state oversight regardless of their global ambitions.

Past events highlight this stance. After Jack Ma criticised regulators in 2020, his disappearance from public view was followed by the suspension of Ant Group's planned IPO and a $2.8 billion fine imposed on Alibaba. In the years that followed, China undertook sweeping regulatory actions across its technology sector, significantly reducing market valuations.

Against this backdrop, recent developments involving Manus were not entirely unexpected. According to a Financial Times report, Manus co-founders Xiao Hong and Ji Yichao were recently called to a meeting with China's National Development and Reform Commission. During this meeting, they were reportedly informed that they would not be permitted to leave the country for the time being.

No formal charges have been announced. Authorities have described the situation as a regulatory inquiry into whether the Meta acquisition violated China's foreign investment rules.

For now, we're treating this as a routine review. However, given the strategic importance of AI and the broader geopolitical stakes, the outcome carries significant implications.

At some stage, Manus's leadership may have believed the transition had been completed successfully. Whether that assumption proves correct remains uncertain. What is clear is that Chinese regulators are now seeking clarity, and until they receive it, Manus's founders are expected to remain in place.