Meta's $1B Manus Acquisition Sparks Praise and AI Exodus Fears

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Meta's Acquisition of Manus Sparks Debate on AI Entrepreneurship and Brain Drain

Meta Platforms' multibillion-dollar acquisition of Manus, a Chinese-founded artificial intelligence agent start-up, has ignited a mix of excitement and concern within China's tech community. The deal is seen as a new "cash-out" route for AI entrepreneurs, offering an alternative to the traditional IPO model. Industry experts highlight two major factors that made this acquisition possible: Manus' progress in developing a globally competitive general AI agent and the founders' decision to relocate their business abroad.

Launched in Wuhan, the capital of central Hubei province, Manus was led by Xiao Hong, who severed its ties with China and moved its headquarters to Singapore in July. This strategic move allowed the company to access overseas capital and expand into global markets. The acquisition by Meta has positioned Manus among the top-tier AI successes in terms of exit value, surpassing other notable Chinese AI startups such as Zhipu AI and MiniMax.

Zhou Hongyi, chairman and CEO of Qihoo 360, hailed the deal as a "victory for China's AI road map." In a video posted on social media, he emphasized that the acquisition marked the first time Chinese-developed AI had secured a place at the "top table" of global tech giants. The news has also generated optimism among founders and investors, with Niu Zhangming, CEO of AI-driven biotech firm MindRank, describing the deal as a potential "significant boon for the ecosystem."

Despite the positive reception, the transaction occurs against a backdrop of heightened US-China competition in the AI sector. Tighter US restrictions on funding and investment in China's advanced AI, semiconductors, and quantum technology have created challenges for Chinese startups. Former Google CEO Eric Schmidt warned that financing constraints could slow China's AI progress, as some start-ups struggle to secure necessary funds.

Domestically, the rise of Manus has resonated with founders who lack elite academic credentials or a Big Tech background. Liu Xingliang, founder of Beijing-based consultancy DCCI, argued that the company shattered venture capitalists' fixation on "Ivy League" degrees and marquee work histories. He emphasized that building a product that speaks for itself is the true passport to the global stage.

None of Manus' three core members fit the traditional profile favored by many Chinese investors: a top-tier university background and Silicon Valley experience. Xiao Hong, the founder and CEO, graduated from Huazhong University of Science and Technology in 2015 and began by building WeChat plug-ins in Wuhan. Two other key members, Ji Yichao and Zhang Tao, graduated from Beijing Information Science and Technology University and Chongqing University of Posts and Telecommunications, respectively.

Liu Yuan, a partner at ZhenFund, which invested in Manus, highlighted that the team's strength lay not in training foundation models but in identifying what is scarce in the current cycle: deep user insight and exceptional product engineering. He noted that these capabilities, often overlooked as "core technology," are crucial for the success of any company or product.

For some founders, the Manus deal has established a new exit path for Chinese entrepreneurs. Bruce Yang, founder of Agnes AI, told Caijing AI Pai that being acquired by a leading US tech company has become a viable target for Chinese founders, particularly those building for overseas markets and aiming for global product leadership.

Manus gained global attention after launching in March as the first "general-purpose" AI agent. It achieved $100 million in annual recurring revenue within nine months. Amid the success, however, some see a darker lesson. Henry Gao, a law professor at Singapore Management University, described Meta's acquisition as a "devastating blow" to China's AI ambitions. He argued that the deal signals that only Chinese firms willing to "uproot themselves entirely" can gain access to global capital, talent, and scale.

The acquisition of Manus underscores the evolving landscape of AI entrepreneurship and the complex interplay between global opportunities and domestic challenges. As Chinese founders navigate this shifting terrain, the implications of such deals will continue to shape the future of AI innovation.