Butterfly Effect Shuts Down China Team Amid Geopolitical Concerns

Jul 14, 2025
Butterfly Effect, the company behind Manus AI, has closed its China operations to mitigate geopolitical risks, according to The Information. The startup is relocating its headquarters to Singapore.
Butterfly Effect Shuts Down China Team Amid Geopolitical Concerns

The Butterfly Effect, the startup behind the Manus AI agent, has shut down its entire China-based team to reduce geopolitical risks, according to The Information. The decision comes as the company shifts its focus to the U.S. market, where connections to China are increasingly viewed as a liability.

In May, the founders of Butterfly Effect, Red Xiao, Peak Ji, and Tao Zhang, moved to Singapore, where the company is now establishing its new headquarters. The startup is also expanding its operations by hiring in Singapore, the U.S., and Japan, and has opened offices in San Mateo and Tokyo. Until recently, several dozen employees were still based in China, but many have since departed.

This move follows a significant funding round in April, where Butterfly Effect raised $75 million, led by Benchmark, to support the Manus AI service. The company aims to strengthen its presence in key markets such as the U.S. and Japan.

We hope you enjoyed this article

Consider subscribing to one of our newsletters like Daily AI Brief.

Also, consider following us on social media:

Free newsletter

Daily AI Brief

Daily report covering major AI developments and industry news, with both top stories and complete market updates

Industry analysis

2025 Global Business Services Agenda: Gen AI Takes Center Stage

The Hackett Group

This industry analysis by The Hackett Group explores the transformative impact of generative artificial intelligence (Gen AI) on global business services (GBS) in 2025. The study highlights the shift from exploration to acceleration of Gen AI initiatives, with 89% of executives advancing these projects to improve customer satisfaction, innovate products, and reduce costs. The report also discusses the challenges and strategies for successful Gen AI adoption, emphasizing the need for a technology-enabled operating model and the importance of reskilling the workforce.

Read more
Free, six days a week

Daily AI Brief: the AI news that matters, in your inbox.