China bans Manus co-founders from leaving country amid Meta startup deal

Chinese authorities have banned two co-founders of Manus from leaving the country while investigating the circumstances of the startup's sale to Meta. The story has quickly escalated beyond a typical M&A transaction: now it concerns control over AI technology, cross-border investments, and the competition between nations for key teams.

Why the authorities intervened

According to FT, Manus co-founders Xiao Hung and Ji Yichao were called to Beijing in March for a meeting with representatives of China's State Development and Reform Commission, one of the country's most influential economic regulators. Both entrepreneurs already work from Singapore, but during their visit to China, they were questioned about potential violations of rules related to foreign investment, and then told they could not leave the country. This is an important signal not only for the company itself.

Chinese authorities are demonstrating they are prepared to scrutinize even those deals where, formally, a foreign structure is involved. If a startup grew out of a Chinese team, developed technology with the participation of local specialists, and subsequently came under the control of an American corporation, such a transition could be interpreted not as an ordinary sale but as a sensitive transfer of competencies and intellectual property.

What is Manus

Manus is one of the fastest-growing startups in the agentic AI segment—that is, systems that not only respond to requests but perform actions on behalf of the user. Such products can work with files, run software, collect data, write code, and complete tasks to results with fewer manual steps. This class of tools is now considered one of the main fronts of competition between major AI companies.

The Meta deal made Manus notable far beyond the specialist AI market. According to Bloomberg, the American corporation agreed to buy the startup in 2025 for approximately $2 billion. Prior to this, Manus had managed to relocate its basic corporate structure to Singapore, but its origins and key founders remain closely tied to China.

This, it appears, is what turned the acquisition from corporate news into a politically sensitive case.

• Chinese authorities have restricted the two Manus co-founders from leaving;
• the investigation concerns possible violations of foreign investment rules;
• Meta acquired the startup for approximately $2 billion in 2025;
• Manus is developing AI agents capable of autonomously performing complex business tasks;
• the company is based in Singapore but grew out of a Chinese team.

Why the market is concerned

For Meta, this story is problematic for several reasons. First, the company is actively expanding its AI direction and seeking ways to more quickly establish itself in the agents market, where value is determined not only by the model but also by ready-made product logic. Second, any restrictions around the founders could slow team integration, technology transfer, and legal closure of deal-related issues.

Even if the business has already been restructured, regulator involvement makes the structure itself less stable. There is also broader context. The US and China are increasingly strict about the movement of AI talent, capital, and technology across borders.

In practice, this means that startups can no longer simply open a holding company in another jurisdiction. If the government has questions about technology origins, investment history, or the chain of control, pressure can begin even after the deal is announced—and can affect the founders personally.

"The transaction fully complied with applicable law,"

Meta stated, adding that they expect the investigation to be resolved.

What this means

The AI market increasingly resembles not a typical startup market but a zone of strategic control. The Manus story demonstrates that acquiring a strong team in agentic AI now depends not only on price and product but also on how governments view the deal. For founders, this is a signal to structure their legal framework and technology path in advance, and for big tech, a signal to prepare for the possibility that even a closed deal could become a geopolitical dispute.