the ties That Bind
According to The Wire China, Manus’s founders, Xiao Hong and Ji Yichao, have already moved most of their team from China to Meta’s Singapore office and have worked hard to eliminate any Chinese ties in the lead-up to the Meta acquisition late last year – even turning down requests from Chinese officials for meetings or investments. He made his way to Singapore by registering the firm Butterfly Effect Pte and establishing Butterfly Effect Holding as the parent company based in the Cayman Islands.
Now, the Chinese government’s decision to cancel the deal creates significant uncertainty for the future AI ambitions of both Manus and Meta. For example, Manus may not be able to continue to deploy its AI agent service using Anthropic’s cloud model, given that Anthropic has limited AI sales to entities in China. In an interview with The Wire China, Chris McGuire, a former Biden administration national security official who designed US restrictions on China-related technology exports and investments, said, “If Manus had remained a Chinese company, its core product would have disappeared.”
The demise of the deal would also deal a blow to Meta’s shift towards AI, which comes after the US tech company spent $80 billion over half a decade in an effort to connect the metaverse with consumers. According to the New York Times, in addition to adding the Manus AI agent to its services, Meta has “deeply integrated” the Manus team with Meta’s own teams in the Singapore office.
What is clear is that Chinese tech founders face bleak prospects when trying to move from a domestic Chinese company to the American tech landscape. In this case, the apparent failure of the “Singapore-washing” model, which is often used by Chinese tech founders attempting to re-establish their company outside China, suggests that founders need to think about setting up shop outside China from “day one,” Wayne Shiong, managing partner at Silicon Valley seed investment firm Argo Venture Partners, said in a CNBC interview.
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