In a striking development reflecting escalating tensions in the global technology sector, recent press reports revealed that Chinese authorities have imposed strict travel restrictions on prominent executives at Manus, one of the leading artificial intelligence startups. Under these restrictions, the two co-founders are barred from leaving Chinese territory while regulatory and government bodies continue intensive investigations to determine whether American tech giant Meta’s approximately $2 billion acquisition of the startup violated laws and regulations governing investment and sensitive technology transfer.
According to the Financial Times, citing sources familiar with the events, CEO Xiao Hong and Chief Scientist Ji Yichao were summoned to an emergency meeting in Beijing this month. The meeting was held with representatives from the National Development and Reform Commission, a highly influential key ministry responsible for economic planning and direct oversight of the country’s artificial intelligence sector.
Following the meeting, the executives were informed of decisive rulings stating that they will not be permitted to leave China while regulatory reviews and government investigations remain ongoing. Despite these strict international travel restrictions, sources confirmed that they still enjoy the freedom to move and travel domestically within China without hindrance.
Legal moves and reactions
Amidst this complex landscape, Manus is striving to address these fallout effects by actively seeking out law firms and specialized consulting agencies to help navigate this legal and regulatory crisis. In response, a Meta spokesperson told Reuters that the American company “has fully complied with all applicable laws,” expressing expectations of reaching “an appropriate and prompt resolution to this investigation.”/>}
Deal details and the company’s rise
Meta officially announced its acquisition of Manus in December 2025. This strategic move comes as part of the American company’s bet on multi-purpose intelligent agents developed by the startup. These systems boast superior capabilities in performing complex tasks such as comprehensive research and advanced automation with minimal human intervention. Sources speaking to Reuters at the time estimated that the deal gave the Singapore-headquartered company a valuation between $2 billion and $3 billion.
It is worth noting that Manus has achieved a meteoric rise since its launch in March 2025, surpassing the $100 million annual recurring revenue milestone in record time. In a proactive move to avoid the negative impacts of rising geopolitical tensions between the United States and China, the company made a strategic decision in mid-2025 to relocate its headquarters from China to Singapore to stay out of direct scrutiny.
Regulatory scrutiny and the chip war
Beijing has not stood idly by in the face of these developments; China’s Ministry of Commerce announced in January that it would conduct a comprehensive assessment and thorough review to determine whether this major transaction complies with export controls, technology transfer rules, and the country’s existing outbound investment regulations. This thorough review represents a true stress test for Beijing’s regulatory framework, which aims to scrutinize foreign interventions in sensitive domestic technologies—much like the operation of the Committee on Foreign Investment in the United States.
Geopolitical dimensions and warning messages
This case goes beyond minor regulatory violations to touch upon deeper geopolitical dimensions. The New York Times reported on March 17 that the strict measures taken by the Chinese government appear primarily aimed at deterring Chinese artificial intelligence leaders and pioneers from moving their vital operations and company headquarters overseas. Thus, the acquisition case is being used as a stern warning message to other founders who might be considering similar steps.
This crackdown comes at a time when the tech sector has seen a mass exodus of Chinese-founded artificial intelligence startups, with companies seeking to relocate operations and headquarters to Singapore to avoid strict geopolitical censorship and business restrictions.
Leverage and legal risks
Beyond regulatory dimensions, political experts and analysts believe Beijing may use this thorny issue as a strategic “bargaining chip” ahead of anticipated trade discussions with Washington. This crisis is unfolding during a highly sensitive period in U.S.-China relations, especially with recent meetings between officials from both countries to prepare for a potential visit by President Trump to China.
On the legal front, specialized legal analysts noted that the company’s founders could face significant regulatory risks and severe consequences under current Chinese laws governing foreign exchange registration and advanced technology export issues. Experts emphasized that these prosecutions can proceed and rely on existing laws without even requiring the introduction or enactment of new regulatory frameworks.
Frequently Asked Questions
Why did Chinese authorities bar the company’s founders from travel?
The travel ban stems from ongoing investigations led by China’s National Development and Reform Commission and Ministry of Commerce to verify whether the acquisition deal violated investment laws and technology export controls.
When was the acquisition deal announced and what was its value?
Meta announced its acquisition of the startup in December 2025, with the deal valued at approximately $2 billion to $3 billion.
Why did the company relocate its headquarters to Singapore?
The company relocated its headquarters to Singapore in mid-2025 as a strategic move to avoid the fallout from ongoing geopolitical tensions between the United States and China.
What are the broader implications of these Chinese investigations?
The Chinese measures are believed to serve as a warning message to deter Chinese AI entrepreneurs from moving their companies abroad, while experts also believe they could be used as a bargaining chip in trade talks between Beijing and Washington.
