Meta’s multibillion Manus buyout draws plaudits, but raises spectre of a China AI exodus

Meta Platforms’ multibillion-dollar acquisition of Manus, a Chinese-founded artificial intelligence agent start-up, has set off a mix of excitement and unease in China’s tech circles, opening what some see as a new “cash-out” route for AI entrepreneurs beyond the traditional IPO playbook.\nIndustry observers said the acquisition was made possible by two key developments: Manus’ progress in building a globally competitive general AI agent and the founders’ decision to relocate the business abroad.\nLaunched in Wuhan, the capital of central Hubei province, the start-up led by Xiao Hong severed its China links and moved its headquarters to Singapore in July, a step that helped it tap overseas capital and markets.\nThe multibillion-dollar price tag paid by Meta has instantly elevated the start-up into the top tier of China-linked AI successes by exit value.\nBy comparison, Zhipu AI – one of China’s best-known AI start-ups – was expected to raise about US$560 million in a Hong Kong listing, while MiniMax is likely to seek roughly US$538 million, according to market expectations.\nZhou Hongyi, chairman and chief executive of Chinese internet security firm Qihoo 360, called the acquisition a “victory for China’s AI road map”.\nIn a video posted across social media on Wednesday, Zhou said the deal marked the first time Chinese-developed AI had earned a seat at the “top table” of global tech giants at the application and agent levels.\nThe news has also fuelled optimism among founders and investors.\n“The overall sentiment has been positive and optimistic,” said Niu Zhangming, chief executive of AI-driven biotech firm MindRank, adding that the deal could be a “significant boon for the ecosystem” by lifting confidence among entrepreneurs, investors and scientists.\n\nDespite the accolades, the transaction has landed against a backdrop of intensifying US-China competition over AI and tighter US curbs on funding and investment in China’s advanced AI, semiconductors and quantum technology.\nFormer Google CEO Eric Schmidt said in early December that financing constraints could slow China’s AI progress because some start-ups “cannot get the money” to keep pace in the race.\nDomestically, Manus’ rise has also struck a chord for founders who lack elite academic credentials or a Big Tech pedigree.\nLiu Xingliang, founder of Beijing-based consultancy DCCI, argued that Manus had shattered venture capitalists’ fixation on “Ivy League” degrees and marquee work histories.\n“Building a product that speaks for itself is the only true passport to the global stage,” Liu said in a video posted on Weibo on Tuesday.\nNone of Manus’ three core members fits the profile traditionally favoured by many Chinese investors: a top-tier university background and Silicon Valley experience.\nXiao Hong, the founder and chief executive, graduated from Huazhong University of Science and Technology in 2015 and began by building WeChat plug-ins in Wuhan.\nTwo other key members, Ji Yichao and Zhang Tao, graduated from Beijing Information Science and Technology University and Chongqing University of Posts and Telecommunications, respectively.\nLiu Yuan, a partner at ZhenFund, which invested in Manus, said the team’s edge was not in training foundation models, but in spotting what is scarce in the current cycle: deep user insight and exceptional product engineering.\n“While these capabilities are often not considered ‘core technology’, they are the decisive factors in the success of any company or product,” Liu said in a statement released by the venture capital firm.\nFor some founders, the Manus deal has established a new exit path for Chinese entrepreneurs.\nBruce Yang, founder of general-purpose AI agent firm Agnes AI, told Caijing AI Pai, an outlet affiliated with financial magazine Caijing, that being acquired by a leading US tech company had become a viable target for Chinese founders – particularly those building for overseas markets and aiming for global product leadership.\nManus vaulted into the global spotlight after launching in March, when it was billed as the first “general-purpose” AI agent. It later hit US$100 million in annual recurring revenue within nine months.\nAmid the fanfare, however, others see a darker lesson.\nHenry Gao, a law professor at Singapore Management University, described Meta’s acquisition as a “devastating blow” to China’s AI ambitions.\nWriting on X on Tuesday, Gao said the deal sent an “unmistakable” signal that only Chinese firms willing to “uproot themselves entirely” could gain access to global capital, talent and scale.\n“The exodus is coming,” he wrote.\n