Meta’s Manus AI Deal Faces China Scrutiny as Founders Are Barred

Manus was once one of the most talked about AI startups in China, celebrated for building general purpose AI agents that could act like digital employees and handle tasks such as research, automation, travel planning, stock analysis, and even job candidate screening with minimal prompting. Its rapid rise made it a symbol of China’s growing AI ambitions, but the company’s latest chapter shows just how politically charged the global AI race has become. What began as a startup success story has now turned into a cross border regulatory drama involving Meta, Chinese authorities, and a deal that may have moved too far, too fast.

The company first gained major attention last year after releasing a demo that suggested its AI agent could outperform OpenAI’s Deep Research. That bold claim helped Manus capture the imagination of investors and users alike. Within weeks, Benchmark led a $75 million funding round that valued the company at $500 million, a striking development given the strategic tension between the United States and China over artificial intelligence. By December, Manus reportedly had millions of users and was generating more than $100 million in annual recurring revenue, placing it among the most prominent AI startups to emerge from China in recent years.

Meta then made a decisive move. In December, the company announced plans to acquire Manus, which it viewed as a valuable addition to its artificial intelligence strategy. While the financial terms were not officially disclosed, reports placed the deal’s value between $2 billion and $3 billion, with TechCrunch reporting the figure at $2 billion. For Meta and CEO Mark Zuckerberg, who have made AI central to the company’s long term direction, the acquisition represented both a talent and technology play. But the deal also immediately raised difficult questions about the transfer of advanced AI capabilities from a Chinese founded company to a major American tech giant.

Part of what made the situation even more sensitive was Manus’s effort to distance itself from China before the sale. According to reporting, the company had relocated its headquarters and core team from Beijing to Singapore and restructured its ownership in an effort to operate outside China’s direct orbit. After the Meta acquisition was announced, Meta pledged to cut ties with Manus’s Chinese investors and shut down its operations in China entirely. By almost every measure, Manus was trying to remake itself as a Singapore based company. Even so, Beijing does not seem prepared to accept that transformation without scrutiny.

That scrutiny has now become highly personal for Manus’s leadership. According to reports, co founders and top executives Xiao Hong and Ji Yichao were summoned this month to a meeting in Beijing with China’s National Development and Reform Commission. After that meeting, they were reportedly told they could not leave the country while regulators review whether the Meta transaction violated China’s foreign investment rules. They are still allowed to travel within China, but the restriction signals how seriously Beijing is treating the matter. Manus is reportedly seeking legal and consulting help as it tries to navigate the review, while Meta has maintained that the transaction fully complied with applicable law and said it expects an appropriate resolution.

The broader significance of the dispute goes beyond a single company. China has long been wary of promising domestic tech firms moving abroad and selling themselves to foreign buyers before they fully mature, a phenomenon sometimes described as “selling young crops.” In the case of Manus, the timing is especially sensitive because AI is now seen as a strategic national priority tied not just to economic competition, but also to geopolitical influence. Beijing has spent years demonstrating that even powerful private companies remain subject to state control, and the Manus case fits squarely within that pattern. What seemed like a clever corporate escape route may instead become a warning that in the global AI race, talent, capital, and technology are never just business assets. They are instruments of national power, and governments are increasingly determined to keep them that way.

Works Cited

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“China Bars Manus Co-founders from Leaving Country amid Meta Deal Review, FT Reports.” Reuters, 25 Mar. 2026, www.reuters.com/world/asia-pacific/china-bars-manus-co-founders-leaving-country-it-reviews-sale-meta-ft-reports-2026-03-25/. 

“China Bars Manus Co-founders from Leaving Country as It Reviews Meta’s $2 Billion Acquisition: Report.” LiveMint, 25 Mar. 2026, www.livemint.com/companies/news/china-bars-manus-co-founders-from-leaving-country-as-it-reviews-metas-2-billion-acquisition-report-11774416004585.html. 

“Applications like Manus show another avenue for artificial intelligence innovation by Chinese tech start ups.” Shutterstock, in Coco Feng, “Chinese AI Agent Manus Transcends Chatbots, Founder of Start up Butterfly Effect Says.” South China Morning Post, 11 Mar. 2025, www.scmp.com/tech/tech-trends/article/3301864/chinese-ai-agent-manus-transcends-chatbots-founder-start-butterfly-effect-says.  

Huiying, Ore. “Tao Zhang, Co founder of Manus AI, during the Singapore Fintech Festival in November.” Bloomberg, in Vlad Savov and Lulu Yilun Chen, “Meta’s Manus Deal Validates Belief in Chinese Innovation.” Bloomberg, 31 Dec. 2025, www.bloomberg.com/news/newsletters/2025-12-31/meta-s-manus-deal-validates-belief-in-chinese-innovation.