- China barred Manus co-founders Xiao Hong and Ji Yichao from leaving the country after Meta acquired the agentic AI startup for $2 billion.
- The National Security Commission branded the deal “conspiratorial” and launched a multi-agency probe spanning export controls, foreign investment, and antitrust law.
- The crackdown effectively kills the “Singapore washing” playbook that other Chinese AI startups had been watching as a potential escape route.
Meta’s $2 billion bet on agentic AI startup Manus has hit a wall that no amount of Silicon Valley dealmaking can move. China’s National Security Commission, chaired by President Xi Jinping, has branded the acquisition “conspiratorial” and triggered a multi-agency review of the transaction, the Financial Times reported.
Co-founders Xiao Hong and Ji Yichao were summoned by China’s top economic planner, the NDRC, in March and have since been barred from leaving the country. Chinese investors are reportedly discussing unwinding the deal. Meta says the transaction complies with applicable law.
The review spans export controls, foreign direct investment rules, and competition law—suggesting Beijing is pulling every regulatory lever available. Some officials worry aggressive measures could send “chilling signals” to the broader tech sector, the FT noted, but the National Security Commission’s involvement means national security concerns are overriding economic caution.
The End of ‘Singapore Washing’
Manus is a textbook case of what Chinese tech circles call “Singapore washing”—relocating a Chinese-founded startup’s headquarters to Singapore while keeping engineering talent in Beijing. The startup moved its HQ in summer 2025, then signed with Meta in December. By early 2026, Meta had moved more than 100 Manus employees to Singapore, according to CNBC.
The model was supposed to thread the needle between Chinese talent and American capital. Beijing’s intervention shattered that illusion. “The path taken by Manus: people will not go down that route anymore,” said a Silicon Valley-based seed investor in AI.
China’s underlying concern is what officials internally call “selling young crops”—the cross-border transfer of emerging technology before domestic firms can capture its value. Agentic AI, which lets software systems take autonomous action on behalf of users, is exactly the kind of capability Beijing considers too strategic to export.
For Meta, the deal was a fast lane into agentic AI—an area where Google and OpenAI have raced ahead. For China, it was a blueprint that dozens of AI startups were watching closely. If Manus could relocate, hire through Singapore, and sell to a US tech giant for $2 billion, the thinking went, others would follow. Beijing just made sure they won’t.
The NDRC summoned the co-founders in March 2026, according to the Financial Times.