Beijing’s surprise intervention on Meta’s Manus renews debates on ‘China

Tech circles from Silicon Valley to Shenzhen buzzed when Meta acquired Manus, a Singaporean AI startup with Chinese roots, for $2 billion late last year.

For Chinese founders striving to build products that could rival American peers, the deal felt like a validation that an intricate offshore structure – known as “Singapore washing” where companies relocate to the city state – was the answer to circumvent scrutiny from both Beijing and Washington. 

Within days, China’s surprise intervention on the deal quickly shattered that hope, as Beijing stepped up efforts to discourage Chinese AI founders from moving business offshore. 

The Chinese government started reviewing whether Manus’ sale had violated laws governing technology exports and outbound investment, and barred co-founders Xiao Hong and Ji Yichao from leaving China for Singapore, according to a Financial Times report earlier this week.

Founded in China, Manus relocated its headquarters and core teams to Singapore last year, allowing it to access deeper capital pools from foreign investors, including the San Francisco-based venture capital firm Benchmark. The company captivated Silicon Valley with an AI agent capable of building websites and executing basic coding tasks independently.

But that investment drew fire in mid-2025 from lawmakers in the U.S. who have prohibited American investors from backing Chinese AI companies directly.

The broadening review by the Chinese government fueled concerns and confusion among a generation of Chinese tech founders and venture capitalists that had quietly embraced the so-called “Singapore-washing” model, forcing a reckoning as the U.S.-China tech rivalry deepens.

“Founders eyeing global expansion and higher valuations would still see the upside of having backers in the U.S.,” Shiong added. Valuations for Chinese AI startups tend to be a fraction of their U.S. peers. 

The Manus deal came as the U.S.-China rivalry in the AI space intensified, and the competition has increasingly been defined not just by access to advanced chips but also by the flow of talent and technology.

Yuan Cao, a Beijing-based lawyer at Yingke law firm, said it was “a red flag for Beijing” for companies to develop technology in China in their early days before “transferring assets to an overseas entity through a restructuring.”