US Reviews Benchmark's Investment in Chinese AI Startup Manus

Manus AI Investment Faces Scrutiny

Manus AI, a rapidly growing AI agent startup, recently secured $75 million in funding, achieving a valuation of $500 million. This funding round was spearheaded by Benchmark.

However, according to two confidential sources who spoke with Semafor, the U.S. Treasury Department is currently reviewing this investment.

Concerns Over Chinese Investment Restrictions

The review centers on potential non-compliance with the 2023 restrictions pertaining to investments in Chinese entities. These regulations aim to limit the flow of capital to companies with ties to China.

Despite these concerns, legal counsel representing Benchmark initially determined the investment to be permissible.

Justification for the Investment

The lawyers argued that Manus AI does not independently develop its own artificial intelligence models. Instead, it functions as an interface, or “wrapper,” utilizing pre-existing models.

Furthermore, it was established that Manus is not directly based in China, as the company is officially incorporated in the Cayman Islands.

This incorporation structure is frequently employed by Chinese companies, such as Alibaba, to facilitate access to international investment.

Public Criticism

The investment by Benchmark has drawn public critique. Delian Asparouhov, a partner at Founders Fund, expressed his disapproval on X (formerly Twitter) with the statement, “wow, actions have consequences?”.

Requests for comment directed to Benchmark, Manus AI, and the Treasury Department have not yet received a response.

The situation highlights the increasing scrutiny surrounding investments in the AI sector, particularly those with potential connections to China.