KUALA LUMPUR: China's action against artificial intelligence firm Manus could weaken Southeast Asia's appeal as a neutral base for cross-border AI investments, an expert says.
Laila Khawaja of Gavekal Technologies said the case showed Beijing no longer accepted the argument that offshore structures in Southeast Asia were beyond its regulatory reach.
“This decision will not stop cross-border AI deals, but it will definitely raise the bar significantly, especially in Southeast Asia, which has been a popular destination for Chinese companies seeking access to global capital and markets,” she told AWANI International.
Khawaja said the region had long been viewed as geopolitically neutral amid intensifying tensions between the US and China.
Her comments followed Beijing's move to block Meta’s proposed acquisition of Manus, a Singapore-based AI startup founded by Chinese entrepreneurs and originally developed in China.
Chinese regulators cited national security concerns and ordered the deal to be unwound.
According to Khawaja, Beijing most likely viewed Manus as prioritising commercial interests over China's national interests.
She said the move was also intended as a warning to Chinese startups considering similar offshore restructuring strategies.
"So even though Manus later cut its China ties, including moving its headquarters to Singapore and shutting down its China business, it does not erase its original Chinese roots," she said.
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