China blocks Meta's acquisition of Manus, disrupting the AI startup's access to Anthropic's Claude models and Meta's AI expansion plans

Manus founders Xiao Hong and Ji Yichao had relocated their team from China to Meta's Singapore office and restructured the company through a Cayman Islands holding entity (Butterfly Effect Holding) in preparation for Meta's acquisition late last year, but the Chinese government has now blocked the deal.

Manus relies on Anthropic's Claude models for its AI agent service (software that independently makes decisions and completes tasks). Since Anthropic has restricted AI sales to entities in China, the blocked acquisition means Manus may lose access to its core product if it remains subject to Chinese jurisdiction.

Meta had spent $80 billion over half a decade on metaverse efforts and had "deeply integrated" the Manus team with its own Singapore office as part of a broader pivot to AI. The deal's collapse creates uncertainty for those integration plans.

The failure of the "Singapore-washing" model (relocating a Chinese company outside China to enter the US tech market) suggests future Chinese tech founders will need to establish operations outside China from the start, according to Wayne Shiong, managing partner of Argo Venture Partners.