What Meta's Manus Acquisition Tells Us - Why Startups Can No Longer Afford to Stay Local

Meta acquired Chinese startup Manus for billions of dollars. Following WhatsApp and Scale AI, this is the third-largest acquisition in Meta’s history. Negotiations closed in roughly ten days. The speed and scale of the deal make it worth examining carefully, because the conditions that made it possible are already reshaping what it means to build a startup anywhere.

The Manus Trajectory

Manus founder Xiao Hong graduated from Huazhong University of Science and Technology. Starting in Wuhan, he built two WeChat plugins and sold them to a unicorn. In 2022, he launched Monica, a browser AI plugin. By March 2025, he released Manus. By December 2025, the product had crossed $100 million in ARR.

In early 2024, ByteDance offered to acquire the company for $30 million. Eighteen months later, the valuation was roughly 70x higher. That trajectory is real, but it required a series of deliberate structural decisions, not just product quality.

Consumer AI Apps at $100M ARR: Where Manus Sat

Consider the valuations of consumer AI apps that have crossed the $100 million ARR mark:

• Perplexity: $20 billion
• ElevenLabs: $6.6 billion
• Lovable: $6.6 billion
• Replit: $3 billion+
• Suno: $2.5 billion
• Gamma: $2.1 billion
• Character: $1 billion+
• Manus: $500 million

Manus was the most reasonably priced of the group while being well-aligned with Meta’s strategic direction. Meta AI had no standalone consumer product with real traction. Manus filled that gap at a price no other option in the cohort could match.

How Chinese AI Companies Are Repositioning, and What It Costs

The more instructive story is what Manus had to give up to reach this outcome. The company was originally based in Beijing. In April 2025, right after raising $75 million from American investors, it abruptly relocated its headquarters to Singapore to avoid U.S. investment restrictions targeting Chinese AI companies. Had it stayed in Beijing, American investors would have been forced to divest their stakes.

Then Manus made an even harder call. In the summer of 2025, it shut down all operations in China: closing its Beijing office, terminating an AI agent collaboration with Alibaba, and abandoning plans to launch a Chinese version of its app.

This was not a clean win. Cutting off the Chinese market entirely, ending a partnership with one of the world’s largest tech companies, and rebuilding legal and operational infrastructure from scratch in a new country: these are genuine costs. Had Manus stayed in Beijing, neither the U.S. government nor the Chinese government would have approved the acquisition. The moment it left China, Beijing lost its leverage over the deal. But Beijing also lost the company.

U.S. investment regulations are not just blocking capital flows. They are driving promising AI companies to leave the Chinese ecosystem entirely and migrate into the American one. Whether that migration is always worth the cost depends on the company. Manus succeeded. Others making the same bet may not.

Why Every Startup Must Think Global Now

The implications for founders elsewhere are concrete. The era when domestic market size determined growth ceilings is over. A domestic market of 50 million versus a global market of 7 billion is not just a numbers difference: it changes investment scale, talent pools, technology access, and exit options.

In the AI era, this gap is sharper. AI products that have not been validated on the global stage are losing competitiveness even domestically. When OpenAI, Anthropic, and Google are targeting your local market directly with their models, there is no protected ground.

Governments Are Adjusting Their Support Structures

South Korea’s Ministry of SMEs and Startups is fundamentally restructuring its support policies as of 2026. The core shift moves toward a “global performance-based support system”: virtually all major programs are being redesigned to prioritize teams with real results in global markets or clear global expansion strategies.

The days of “we’ll consider going global later” are ending. Ecosystems are reorganizing around teams that target global markets from the start, build to global standards, and can communicate with global investors.

What the Acquisition Actually Demonstrates

What makes the Manus acquisition significant beyond the dollar amount: an Asian founder was appointed VP responsible for a core strategic pillar at a global company, with guaranteed operational independence. That outcome required not just strong product execution but a willingness to make costly, irreversible structural choices early.

Founders in smaller markets face the same underlying question. Grow incrementally inside a domestic market, or compete globally from the start and accept that global competition requires choosing which ecosystem’s rules you play by. The Manus case shows both the upside of that choice and what it requires you to abandon.