China bars Manus co-founders from leaving the country amid startup's Meta deal

Chinese authorities have barred two Manus co-founders from leaving the country while they examine the circumstances of the startup's sale to Meta. The story quickly outgrew a routine M&A deal: it is now about control over AI technology, cross-border investment, and the competition between states for key teams.

Why regulators stepped in

According to the FT, Manus co-founders Xiao Hong and Ji Yichao were summoned to Beijing in March to meet with officials from China's National Development and Reform Commission, one of the country's most powerful economic regulators. Both entrepreneurs already work out of Singapore, but during their visit to China they were questioned about possible violations of foreign investment rules and then told they could not leave the country.

The signal matters beyond Manus itself. Chinese authorities are showing they are willing to scrutinize even deals that formally involve a foreign entity. If a startup grew out of a Chinese team, built its technology with local engineers, and then came under the control of an American corporation, regulators may treat the move not as an ordinary sale but as a sensitive export of expertise and intellectual property.

What is Manus

Manus is one of the fastest-growing startups in agentic AI — systems that don't just answer queries but take actions on a user's behalf. These products can work with files, run software, collect data, write code, and carry a task through to completion with fewer manual steps. This class of tools is now considered one of the main battlegrounds among major AI companies.

The Meta deal made Manus visible far beyond the specialist AI market. According to Bloomberg, the American company agreed in 2025 to buy the startup for roughly $2 billion. Before that, Manus had moved its core corporate structure to Singapore, but its origins and key founders remain closely tied to China. That appears to be what turned the acquisition from a corporate news item into a politically sensitive case.

Here is what is known so far:

• Chinese authorities have restricted travel for two Manus co-founders;
• the review concerns possible violations of foreign investment rules;
• Meta acquired the startup for roughly $2 billion in 2025;
• Manus builds AI agents that can autonomously handle complex work tasks;
• the company is based in Singapore but grew out of a Chinese team.

Why the market is nervous

The situation is awkward for Meta on several fronts. First, the company is aggressively expanding its AI business and looking for faster ways into the agents market, where value depends not only on the model but also on ready-made product logic. Second, any restrictions on the founders could slow the team's integration, the technology transfer, and the legal wrap-up of the deal. Even if the business has already been restructured, regulator involvement makes the whole arrangement less stable.

There is a broader context too. The US and China are taking an increasingly hard line on cross-border movement of AI talent, capital, and technology. In practice, that means it is no longer enough for startups to simply set up a holding company in another jurisdiction. If a government still has questions about a technology's origins, investment history, or chain of control, pressure can begin after a deal is announced — and reach the founders personally.

"The transaction fully complied with applicable law,"

Meta said, adding that it expects the review to be resolved.

What it means

The AI market looks less and less like an ordinary startup market and more and more like a zone of strategic control. The Manus case shows that buying a strong agentic AI team now depends not only on price and product but also on how governments view the deal. For founders, it is a signal to plan their legal structure and technology pathway in advance; for Big Tech, it is a warning that even a closed deal can turn into a geopolitical dispute.

*Meta is designated an extremist organization and banned in Russia.