How Manus, Meta’s newest acquisition target, got around worries over its ties to China

The $2.5 billion deal could herald a new era for China-linked AI companies and U.S. investors

- Raffaele Huang, Kate Clark & Amrith Ramkumar

The assumptions that underlie the East-West divide were turned upside down Monday when Meta Platforms said it was buying Manus, which is now based in Singapore.

(AFP)

Workers at Butterfly Effect, an artificial-intelligence startup with Chinese roots, gathered in March to count down to the launch of a demo of a new AI-powered tool called Manus.

Released in the shadow of Deep-Seek, a China-built AI model that rocked the U.S. market in January owing to its advanced capabilities and low cost, Manus became an overnight hit. The product, which used models from Anthropic and others to produce detailed research reports and perform a host of other tasks, showcased the talents of China's entrepreneurs and startups in a burgeoning global battle for Al supremacy.

The assumptions that underlie the East-West divide were turned upside down Monday when Meta Platforms said it was buying Manus, which is now based in Singapore. The deal, which was valued at $2.5 billion, according to people familiar with the matter, included a $500 million retention pool for the startup's employees, one of the people said.

Chinese AI chip makers, chatbot developers and robotics startups have recently raised billions of dollars and are preparing for initial public offerings in Shanghai or Hong Kong. But they still face challenges squaring off with U.S. rivals that can access enormous sums to compete globally.

The founders of Manus made strategic decisions to distance it from its Chinese roots, helping position the company for U.S. investment.

Winston Ma, a professor at New York University School of Law and a partner at Dragon Capital, said that if the deal closes smoothly, "It creates a new path for the young AI startups in China." The question is "whether D.C. will support this or say this is just another way of U.S. capital being invested into a Chinese company," he said.