The least surprising chapter of the Manus story is what’s happening right now

Okay, so the US and China are in an all-out race to build the most powerful AI in the world. Beijing is throwing billions at homegrown models, tightening its grip on the tech sector and nervously watching its best AI talent focuses on American companies. Yet Manus – one of China’s most high-profile AI startups – quietly moved to Singapore and sold itself to Meta for $2 billion.

Would anyone have thought that would be the case not make a settlement about this relationship?

As industry watchers know, Manus burst onto the scene in the spring of last year with a demo video in which an AI agent screens candidates, plans vacations, and analyzes stock portfolios, and boldly claimed that it outperformed OpenAI’s Deep Research. Within weeks, Benchmark – the consummate Silicon Valley venture capital firm – led a $75 million funding round at a $500 million valuation. That was surprising. (Senator John Cornyn had thoughts, tweet at the time: “Who thinks it’s a good idea for American investors to subsidize our biggest adversary in AI, then let the CCP use that technology to challenge us economically and militarily? I don’t.”)

As of December, Manus had millions of users and was generating more than $100 million in recurring revenue annually. Then Meta came calling and Mark Zuckerberg, who has bet the company’s future on AI, bought it for $2 billion. That was also surprising.

It’s worth noting that Manus didn’t just sell itself to an American buyer; for most of last year it actively sought to operate outside China’s sphere of influence. The company moved its headquarters and core team from Beijing to Singapore, restructured its ownership and after the Meta deal was announced, Meta decided promised to cut all ties with Manus’ Chinese investors and completely ceased operations in China. By every measure, Manus tried to make itself a Singapore company.

But if that series of events raised eyebrows in Washington, one can only imagine they were apoplectic in Beijing.

China has a line for all this: “sale of young crops” – Homegrown AI companies moving abroad and selling themselves to foreign buyers before they fully mature, taking their intellectual property and talent with them.

Beijing hates it too and has for years established that no company operates outside its reach. We all remember the time Jack Ma gave a speech in 2020 mildly criticizing Chinese regulators, after which he disappeared from public life for months, Ant Group’s successful IPO was killed overnight and Alibaba was fined $2.8 billion. China then spent the next two years methodically dismantling its own booming tech sector, wiping out hundreds of billions in market value. Chinese leaders are many things, but subtle is not one of them.

That’s why it wasn’t entirely surprising when the Financial Times reported on Tuesday that Manus co-founders Xiao Hong and Ji Yichao had been summoned to a meeting with China’s National Development and Reform Commission this month and told would not leave the country for a while.

No formal charges have been filed – just an investigation into whether the Meta deal violated Beijing’s foreign investment rules.

Beijing calls it a routine regulatory review.

At some point, someone at Manus probably thought they had gotten away with it, and maybe they still will. But given the stakes of the AI ​​race, that was always a big gamble. Now Beijing wants answers; The Manus founders apparently aren’t going anywhere until they get them.