Manus AI investment faces U.S. Treasury review

Manus AI, a notable player in the artificial intelligence startup scene, recently attracted $75 million in new funding, raising its valuation to half a billion dollars. This significant investment, steered by Benchmark, is now facing scrutiny from the U.S. Treasury Department regarding its adherence to rules that limit investments in certain Chinese entities released in 2023.

Attorneys representing Benchmark allowed the funding after determining that Manus AI is not developing its own artificial intelligence systems but instead operates by integrating capabilities from existing platforms. Their legal team also maintained that Manus AI’s registration in the Cayman Islands prevents it from being officially classified as a Chinese company, even though this setup is frequently employed by Chinese corporations seeking foreign investments.

Controversy Surrounds International Ties

The presence of this common Cayman Islands structure, previously adopted by large Chinese companies, has raised concerns about transparency and compliance in global funding. Founders Fund partner Delian Asparouhov publicly questioned Benchmark’s decision on social media, highlighting the growing tension and ethical concerns within the investment community.

Up to now, representatives from Benchmark, Manus AI, and the Treasury Department have not provided comments regarding the ongoing review. The issue underscores the complex environment venture capital faces when investing in companies with international ties and novel technological approaches.