Manus AI’s $75 Million Gamble: Why Butterfly Effect Ditched China for Singapore

Butterfly Effect, the AI startup behind Manus AI, has made a bold decision to relocate its headquarters from China to Singapore. This move comes amid rising geopolitical tensions and increasing U.S. export restrictions on advanced technology.

The company has also shut down its entire China team, signaling a decisive break from its origins. Founders Red Xiao, Peak Ji, and Tao Zhang have established Singapore as the new global base since May 2025.

What prompted Butterfly Effect’s move out of China?

The escalating tech rivalry between the U.S. and China has severely restricted Chinese firms’ access to critical Nvidia chips essential for AI development. Benchmark Capital's $75 million funding round and U.S. export controls forced Butterfly Effect to reevaluate its base.

To avoid jeopardizing access to key resources, Butterfly Effect distanced itself from Chinese operations and emphasized its parent company’s Cayman Islands incorporation and Western cloud data storage.

Did you know?
Butterfly Effect’s parent company is incorporated in the Cayman Islands, a move that helps distance the startup from direct Chinese regulatory control.

Butterfly Effect’s strategic repositioning explained

By relocating to Singapore, Butterfly Effect aims to reposition Manus AI as a global player free from the limitations imposed by China’s regulatory environment. The startup is actively recruiting talent in Singapore, offering competitive salaries ranging from $8,000 to $18,000 per month.

This move also aligns with the company’s focus on international markets, particularly the U.S., where Chinese ties are increasingly viewed as a liability.

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Manus AI’s global expansion plans

Beyond Singapore, Butterfly Effect has opened offices in San Mateo, California, and Tokyo, Japan. The company is aggressively hiring engineers, product managers, and data specialists to support its worldwide ambitions.

Manus AI recently launched a subscription service with pricing tiers similar to OpenAI’s ChatGPT Pro, aiming to capture a significant share of the AI tools market despite some users noting the product still needs refinement.

The company is enhancing Manus AI’s features, including task scheduling and automated slide deck creation, to stay competitive.

Butterfly Effect’s relocation and expansion reflect a broader trend of Chinese tech firms navigating geopolitical pressures by establishing bases in more neutral territories. This strategy could redefine the future landscape of AI innovation and global tech competition.