Manus AI, a fast-growing startup building AI agents for tasks like research, coding, and data analysis, is now at the center of the U.S.–China tech rivalry. Originally founded in Beijing, the company relied on Anthropic’s U.S.-based Claude model for rapid development, but this clashed with China’s tight generative AI regulations. Manus did not manage to win the approval of Chinese authorities, so it pulled out of the domestic market. It has since turned to international users and moved its headquarters here to Singapore, a smart move that not only enhances access to global capital, high-end GPUs are produced in the U.S. and high-wage foreign markets but also avoids direct regulatory headwinds.
Strategic Relocation Reflects Rising Geopolitical Pressures on AI Startups
Manus AI pivots to Singapore in July 2025, followed by growing friction on multiple fronts. China’s Cyberspace Administration had approved only domestic AI models, effectively locking out foreign large language models like Anthropic’s Claude. This regulatory wall made a China launch impossible. Simultaneously, Manus faced scrutiny in the U.S. after raising $75 million in April from investors including Benchmark Capital, Tencent, and ZhenFund. Under the 2023 U.S. outbound investment rules, such funding to Chinese firms in sensitive sectors requires notification, and in some cases, divestment. These laws target technologies with potential military or surveillance applications, with AI high on the priority list.
By moving its legal base to Singapore, Manus distances itself from the “China-headquartered” label that triggers automatic U.S. oversight. However, relocation doesn’t fully exempt it from U.S. export controls on advanced GPUs. Singapore still requires permits under its Strategic Goods Control Act, aligning with U.S. rules designed to prevent tech diversion to China. Such a realignment also aligns Manus more with high-paying international customers, those in the U.S., EU, and APAC, where the propensity to pay is much higher than the case in China. This conjunction of geopolitical isolation, market access, and computing availability illustrates the point that AI business strategy is becoming more global and yet fragmented.
Economic Incentives Drive Focus on High-Value International AI Markets
The decision to leave China was also rooted in economics. Manus’ founders highlighted that overseas customers are roughly five times more willing to pay for AI services, and when combined with the yuan-to-dollar exchange rate, the potential revenue multiple climbs to 35x. AI agents, especially multi-agent “swarms” capable of complex collaborative work, consume vast compute resources, making high-margin, dollar-denominated subscriptions essential for scaling. Manus now charges $199 per month for premium plans, targeting professional and enterprise clients outside mainland China.
This market shift aligns with Singapore’s advantages: stable regulation, strong intellectual property protections, and easier access to U.S.-made GPUs like Nvidia’s H100 and B200, albeit under export license regimes. The relocation also opens doors for partnerships in APAC and the West, enabling growth without the bottlenecks imposed by Chinese AI compliance frameworks. Still, the move has drawn criticism from Chinese commentators, who accuse the startup of exploiting domestic engineering talent before abandoning the market. With more than 500 AI startups operating in China, Manus’ exit fuels debate about the “engineer dividend” and the brain drain toward global hubs. For Manus, the calculus is clear: capital, compute, and paying customers take precedence over geographic loyalty in today’s divided AI economy.
Manus AI – Journey Illustrates the Fragmentation of Global AI Innovation
Manus AI evolution reflects the deepening split between the U.S. and Chinese AI ecosystems. For startups, building products for both markets is increasingly untenable due to regulatory red lines, export controls, and investment restrictions. Manus’ Singapore relocation, investor mix, and technology stack reveal a strategic bet on open, higher-value markets, albeit with lingering exposure to geopolitical risk. The company’s ability to thrive will hinge on securing compute access, expanding global user adoption, and maintaining compliance across jurisdictions. In a world where AI innovation is shaped as much by law as by code, Manus’ story shows why agility is now a survival skill.
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