The race between the U.S. and China to dominate AI technology intensifies, with China investing heavily in its tech sector while facing brain drain to U.S. companies. A Carnegie Endowment report highlighted that 87 out of 100 leading Chinese AI academics at U.S. institutions in 2019 remain there.
Meanwhile, Manus, a prominent China-based AI startup, has discreetly moved to Singapore and was acquired by Meta for $2 billion. This move wasn’t without controversy.
Manus gained attention last year with a demo showcasing an AI agent managing various tasks successfully, and claiming superiority over OpenAI’s Deep Research. It quickly secured $75 million in funding at a valuation of $500 million, led by Benchmark, raising eyebrows and political commentary, including from Senator John Cornyn.
By December, Manus boasted millions of users and over $100 million in annual recurring revenue. Meta’s acquisition came as Mark Zuckerberg focused on AI development.
Significantly, Manus had been working to separate itself from China’s influence. It relocated to Singapore, restructured ownership, and Meta committed to severing ties with Chinese investors and ending its China operations, aiming to establish itself as a Singaporean company.
In Washington, this drew attention, but in Beijing, it led to significant concern.
China has a term, “selling young crops,” for domestic AI companies that relocate and sell to foreign entities, taking valuable IP and talent with them.
Beijing has been tightening control over tech companies, evident from the repercussions faced by Jack Ma and Alibaba. As such, strategies like Manus’s often don’t go unnoticed.
Recently, Manus co-founders faced an inquiry by China’s National Development and Reform Commission, questioning if the Meta acquisition complied with foreign investment regulations.
China labels it a standard regulatory check.
While there might have been initial belief at Manus that their strategy succeeded, the risk was substantial amidst the competitive AI landscape. Now, the attention is on Manus and its founders, as Beijing awaits explanations before allowing them to continue their operations freely.