Meta acquired Manus AI startup for $2 billion last year, but the deal has now come under scrutiny from Chinese authorities, highlighting rising tensions over cross-border tech deals. The Chinese government is currently reviewing whether the transaction violated rules related to technology exports and overseas investments. The development has drawn attention across the tech industry, suggesting that shifting company headquarters may no longer shield firms from regulatory action. The case is being seen as a key example of how ‘Singapore washing’ may no longer work for Chinese and American companies.
What is “Singapore washing”
“Singapore washing” is a strategy used by some startups with Chinese roots to move their headquarters to Singapore, as explained in a CNBC report. Relocating headquarterrs to Singapore allows companies to attract global investors and operate with less direct scrutiny from Chinese and US regulators. Manus had followed a similar path. The AI firm relocated its base and core operations to Singapore while continuing to build its technology with links to China. The approach has been popular among founders looking to access international funding while managing regulatory risks.
Scrutiny signals limits of offshore structures
The CNBC report said China’s response to the Manus deal shows that authorities are now focusing more on where technology is developed, rather than where a company is officially registered. Chinese regulators reportedly restricted the company’s founders from leaving the country and began examining the deal soon after it was announced.Experts cited in the report said this could mark a shift for startups that relied on offshore structures. Investors and founders are now reassessing their strategies as both China and the US increase oversight of AI companies. As per the report, some founders may now choose to build companies outside China from the beginning, instead of moving later.