US Scrutinizes Benchmark’s Investment in Chinese AI Firm Manus
▼ Summary
– Manus AI raised $75 million at a $500 million valuation in a round led by Benchmark.
– The U.S. Treasury Department is reviewing the investment for compliance with 2023 restrictions on Chinese company investments.
– Benchmark’s lawyers approved the deal, arguing Manus is an AI “wrapper” and not developing its own models.
– They also claimed Manus isn’t China-based due to its Cayman Islands incorporation, a common structure for Chinese firms.
– Founders Fund partner Delian Asparouhov criticized Benchmark’s investment, posting “wow, actions have consequences?” on X.
A major U.S. venture capital firm’s investment in Chinese artificial intelligence startup Manus has drawn regulatory scrutiny, according to sources familiar with the matter. The Treasury Department is reportedly examining whether Benchmark Capital’s $75 million funding round complies with recent restrictions on American investments in China’s tech sector.
Manus AI, valued at $500 million in its latest funding, specializes in developing AI agent technology rather than creating foundational models. The company operates as a platform that enhances existing AI systems, which Benchmark’s legal team reportedly determined exempts it from current investment bans. The startup’s Cayman Islands incorporation—a common structure for Chinese firms seeking foreign investment—also factored into the firm’s decision to proceed with the deal.
The transaction has sparked debate within Silicon Valley, with Founders Fund’s Delian Asparouhov publicly questioning the move on social media. His cryptic post—”wow, actions have consequences?”—hinted at broader concerns about U.S. capital flowing into China’s AI ecosystem amid escalating geopolitical tensions.
Neither Benchmark nor Manus has commented on the reported review, and Treasury officials have yet to confirm the investigation. The situation highlights the growing complexity of cross-border tech investments as Washington tightens oversight of sensitive technologies. Legal experts note that while offshore incorporation may provide some insulation, regulators are increasingly scrutinizing corporate structures designed to circumvent restrictions.
The outcome could set an important precedent for how U.S. investors navigate China’s AI landscape under current rules. With both nations racing to dominate artificial intelligence, financial partnerships remain a contentious issue—one where legal interpretations and national security concerns frequently collide.
(Source: TechCrunch)
