Meta’s $2 billion acquisition of AI assistant platform Manus was always going to attract scrutiny. What’s surprising is where the real friction is coming from.
Washington, which only months ago was alarmed by U.S. money flowing into Chinese AI, is relatively calm about the deal. Beijing is not.
From D.C. panic to quiet approval
Manus didn’t start out as a Singapore AI startup. It was born in Beijing.
When Benchmark led a financing round for Manus earlier in 2025, it triggered an immediate political backlash in the U.S.:
- Senator John Cornyn blasted the investment on X.
- The U.S. Treasury Department opened inquiries tied to new rules restricting American investment in Chinese AI companies.
The pressure was strong enough that Manus eventually shifted its base from Beijing to Singapore. One Chinese professor described the move on WeChat as part of the company’s "step-by-step disentanglement from China."
That repositioning appears to have calmed U.S. concerns. According to the Financial Times, American regulators now seem satisfied the Meta–Manus deal is legitimate, despite their earlier misgivings about Benchmark backing a China-rooted AI player.
Beijing discovers leverage in "Singapore washing"
The mood in China is very different.
Chinese regulators are reportedly reviewing whether Meta’s acquisition violates the country’s technology export controls. Specifically, officials are asking whether Manus should have obtained an export license when it moved its core team and technology from China to Singapore.
That kind of move has become so common among Chinese startups that it now has a nickname: "Singapore washing" — shifting teams and IP to the city-state to escape Chinese oversight and make deals with Western buyers easier.
A recent Wall Street Journal article suggested Beijing had "few tools to influence the deal given Manus’s foothold in Singapore." The latest signals from regulators suggest that judgment may have come too soon.
The concern in Beijing is strategic: if the Meta deal sails through, it could encourage a wave of Chinese AI startups to physically relocate in order to dodge domestic controls. Winston Ma, a professor at New York University School of Law and partner at Dragon Capital, told the Journal that if the deal closes smoothly, "It creates a new path for the young AI startups in China."
Legal risk for Manus founders — and a TikTok precedent
China has used export control law as geopolitical leverage before.
During Donald Trump’s first-term push to ban TikTok in the U.S., Beijing quietly intervened by adding recommendation algorithms to its export control list. That move complicated any forced sale of TikTok’s U.S. operations by making its core technology subject to Chinese approval.
A similar playbook may now be in motion. The Chinese professor who commented on WeChat about Manus’s "disentanglement" also warned that the founders could face criminal liability if they exported restricted technology without authorization.
If regulators decide Manus should have obtained a license before moving to Singapore, they could, at minimum, slow or condition Meta’s acquisition — and, at maximum, threaten the company’s leadership directly.
Why Washington is calling this a quiet win
While Beijing looks for ways to pull the brake, some U.S. analysts are framing Meta’s acquisition as validation of Washington’s tougher stance on outbound AI investment.
The logic: if prominent Chinese AI talent and companies are relocating to places like Singapore and ultimately selling to U.S. buyers, then export and investment restrictions may be working as intended.
One expert told the Financial Times that the deal shows "the US AI ecosystem is currently more attractive." In other words, brains and IP are still flowing toward American platforms — even if they start out in Beijing.
What this means for Meta and future AI deals
For Meta, the core question is timing. The company wants to integrate Manus’s AI agent software across its products, from messaging to productivity tools. It’s too early to know whether Beijing’s review will materially slow that roadmap.
But this much is clear: a $2 billion transaction that once looked like a straightforward bet on an AI assistant platform is now entangled in a larger geopolitical contest over where next-generation AI gets built, owned and controlled.
Whatever happens to Meta–Manus, every AI startup with roots in China — and every Western acquirer eyeing them — is watching closely. If Beijing decides to make an example of this deal, "Singapore washing" may no longer be the safe escape hatch it appeared to be a year ago.
