The co-founders of Manus, the Chinese artificial intelligence startup that captured global attention earlier this year with its autonomous AI agent, have been barred from leaving China by government authorities, according to a report from The Information. The travel restrictions represent a dramatic escalation in Beijing’s willingness to exert control over its most prominent AI entrepreneurs — and raise uncomfortable questions about the intersection of state power and private innovation in the world’s second-largest economy.
The restriction applies to at least two of Manus’s co-founders, though the exact reasons behind the government’s decision remain murky. What’s clear is that this is no ordinary regulatory inquiry. Exit bans in China are typically associated with criminal investigations, national security concerns, or disputes involving state interests. For the founders of one of the hottest AI startups to emerge from China this year, the implications are severe.
Manus burst onto the scene in March 2025 with a product demonstration that went viral. The company showcased an AI agent capable of autonomously completing complex, multi-step tasks — booking travel, conducting research, writing code — without constant human oversight. The demo drew immediate comparisons to OpenAI’s efforts in agentic AI and briefly made Manus the most talked-about startup in Chinese tech circles. Investors rushed in. The company’s valuation reportedly soared past $500 million within weeks of its public debut.
Now, that meteoric rise has collided with the hard realities of operating a technology company under Beijing’s watchful eye.
A Pattern of Control That’s Accelerating
Exit bans aren’t new in China. But their application to AI startup founders marks a notable expansion of the tactic beyond its traditional targets — executives at state-owned enterprises, financial sector figures, and individuals accused of corruption.
In recent years, Chinese authorities have imposed travel restrictions on a widening circle of business leaders. In 2023, executives at Bain & Company’s Shanghai office were questioned by police. That same year, due diligence firm Mintz Group saw its Beijing staff detained. The message was consistent: the government’s reach extends to anyone it considers relevant to national interests.
AI has become perhaps the most sensitive sector of all. Beijing views artificial intelligence as a strategic asset — central to economic competitiveness, military modernization, and geopolitical positioning against the United States. The technology sits at the exact intersection of commercial value and state security. And the Chinese government has shown repeatedly that it won’t tolerate losing control over assets it considers strategic.
The Manus case fits this pattern but also extends it. Unlike the crackdowns on Alibaba, Didi, or the private tutoring industry in 2021, this isn’t about reining in a company that’s grown too large or too influential. Manus is still a startup. Its co-founders aren’t billionaires. The company doesn’t have hundreds of millions of users. Yet the government has apparently decided that even at this early stage, the people behind a promising AI venture cannot be allowed to simply leave.
Why? Several theories are circulating among investors and industry insiders in both Beijing and Silicon Valley.
One possibility: authorities are concerned about intellectual property and talent flight. With U.S. export controls tightening access to advanced chips and AI technology, China can’t afford to see its best AI minds relocate abroad. The co-founders of Manus, who reportedly have ties to elite Chinese universities and research institutions, represent exactly the kind of human capital Beijing wants to keep within its borders.
Another theory involves data. AI agents like Manus interact with vast amounts of user information to complete tasks. If the company’s technology has been tested on or integrated with systems that touch sensitive Chinese data — government, corporate, or personal — authorities may view the founders’ potential departure as a security risk.
A third, more prosaic explanation: this could be linked to a financial or regulatory investigation that hasn’t been made public. China’s startup funding environment has been under increasing scrutiny, with regulators examining everything from foreign investment structures to tax compliance. Variable interest entity (VIE) structures, the legal architecture that most Chinese tech startups use to accept foreign capital, have been a particular point of tension.
None of these explanations are mutually exclusive. And none have been confirmed.
The Chilling Effect on Chinese AI Investment
For foreign investors, the Manus situation is a flashing warning light.
Venture capital funding into Chinese AI startups had been experiencing a resurgence in early 2025, buoyed by excitement over companies like Manus, DeepSeek, and Moonshot AI. The success of DeepSeek’s open-source models, which demonstrated that Chinese researchers could produce competitive AI systems at a fraction of the cost of their American counterparts, had reinvigorated interest from global investors who had pulled back during the regulatory crackdowns of 2021-2023.
But the exit ban on Manus’s co-founders threatens to reverse that momentum. If founders can be prevented from leaving the country without public explanation or due process, the risk calculus for investing in Chinese AI shifts dramatically. Venture investors price in many kinds of risk — technology risk, market risk, competition risk. Sovereign risk of this nature is harder to model and harder to stomach.
Several prominent venture capitalists, speaking on background, told industry publications in recent days that they’re reassessing their China AI exposure. One Silicon Valley-based investor told colleagues that the Manus situation “makes it impossible to do honest due diligence” on Chinese AI deals, according to conversations relayed to multiple outlets.
The timing compounds the problem. U.S.-China tensions over trade, tariffs, and technology have been intensifying throughout 2025. The Trump administration has expanded chip export restrictions and signaled willingness to go further. In this environment, any sign that Beijing is tightening its grip on AI talent and companies gives American hawks more ammunition to argue for further decoupling.
Chinese AI companies that have been courting international partnerships and customers face a credibility challenge. If your co-founders can’t leave the country, how do you pitch to enterprise clients in Europe or Southeast Asia? How do you attend YC Demo Day or speak at a conference in San Francisco? The practical implications for business development are significant, even before you get to the existential questions about founder autonomy and corporate governance.
Manus itself hasn’t publicly commented on the situation. The company’s social media accounts have been quiet. Its website continues to showcase the AI agent product, but there’s been no new product announcements or updates in recent weeks. The silence is conspicuous for a company that was, just months ago, one of the most vocal and visible startups in Chinese tech.
Industry observers in Beijing have noted that other AI startup founders are watching the Manus case closely. Some have reportedly accelerated plans to establish dual headquarters or residency outside mainland China — in Singapore, Dubai, or Tokyo — as a hedge against similar restrictions. Others are quietly consulting lawyers about their own exposure.
This brain drain dynamic is precisely what Beijing says it wants to prevent. But the heavy-handed approach may be accelerating the very outcome authorities fear. Talented founders and researchers who might have stayed in China are now calculating whether they can afford not to have an exit option.
What Happens Next
The Manus co-founders’ situation could resolve quietly. Exit bans in China are sometimes temporary, lifted after authorities complete an investigation or receive assurances. It’s possible this is a short-term measure tied to a specific inquiry that will conclude without further action.
But it could also escalate. If criminal charges follow, or if the travel restrictions become indefinite, the case will become a landmark moment for China’s AI industry. It would signal that Beijing views AI founders not as entrepreneurs to be celebrated but as custodians of state-adjacent technology who operate at the government’s discretion.
The broader context matters enormously. China is simultaneously trying to win a global AI race and maintain authoritarian control over the people building the technology. These two objectives are in fundamental tension. Innovation thrives on openness, mobility, and the free exchange of ideas. Control requires the opposite.
So far, China has managed this tension better than many Western observers expected. Companies like ByteDance, Huawei, and now DeepSeek have produced globally competitive technology despite operating under significant government oversight. But each new restriction — each exit ban, each data security review, each regulatory crackdown — tests the limits of that balance.
The Manus case may prove to be a footnote. Or it may be the moment that the balance tips.
For now, two of the most promising young AI entrepreneurs in China can’t leave the country. And nobody outside the Chinese government knows exactly why.
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