China’s Probe of Meta’s Manus Purchase Sends Startups Scrambling

China’s AI startup founders are jittery. The Chinese government’s investigation of Manus’ sale to Meta Platforms has cast a shadow over a popular exit path for startup founders. And it has caused some startups to consider moving out of China or to shift some operations to Singapore.

While some AI startups are happy to stay in China, relying on venture capital funding from China and Asia, those with ambitions to sell their products globally and to raise money from U.S. venture capitalists are taking a different view. 

“If you want to build AI products for markets outside China now, you will have to think even more carefully about which markets to target, how to structure your business and whether to raise money in Chinese yuan or U.S. dollars,” said Hank Yuan, a co-founder of a new Shenzhen-based startup that is trying to build an AI agent for the global market. 

“All the AI startup founders I know are paying attention to Manus,” he added.