The Split Between China and Silicon Valley Just Got Wider

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The Split Between China and Silicon Valley Just Got Wider

Beijing’s insistence that Meta unwind its deal with a Chinese A.I. start-up escalates the geopolitical fight over advanced tech.

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China demanded on Monday that Meta’s $2 billion deal with the A.I. start-up Manus be undone.

Credit...

Ian C. Bates for The New York Times

By

Meaghan Tobin

and

Erin Griffith

Meaghan Tobin reported from Taipei, Taiwan, and Erin Griffith from San Francisco.

April 29, 2026

Updated

4:18 p.m. ET

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Manus, an artificial intelligence start-up, began with an idea among three engineers in Wuhan, China, united by an obsession with A.I. and a shared ambition to build a global venture. From the outset, they looked beyond China.

Their big break came last March. Manus had drawn the attention of Silicon Valley investors with an A.I. agent capable of carrying out tasks on its own. By year’s end, Meta had agreed to acquire Manus.

It looked like a clean breakout from China’s crowded, tightly-regulated market and a path to the world stage. Then, on Monday, the Chinese government stepped in and demanded that the

$2 billion deal

be undone.

A decade ago, Silicon Valley investors raced to back Chinese start-ups. Today, few do. Deals like Meta’s acquisition of Manus were already rare, as China’s tech sector drifted from American capital. Beijing’s intervention sharpens the split.

Investors and founders say the move reflects a fragmenting landscape. Chinese start-ups are raising money at home and building for domestic markets, while U.S. investors steer clear of the scrutiny that comes with backing them.

“Great founders and free markets used to decide who won, but increasingly, outside forces may have the final say,” said Linus Liang, an investor at Kyber Knight, a venture firm based in San Francisco.

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