Manus AI, a rapidly growing AI agent startup, recently secured $75 million at a notable $500 million valuation with Benchmark leading the investment. However, the U.S. Treasury Department is reviewing the investment for compliance with restrictions on dealings with Chinese entities. Benchmark's legal team has deemed Manus compliant based on its operational modelâacting as a 'wrapper' around existing AI modelsâand its incorporation in the Cayman Islands, traditionally used by Chinese firms for foreign investments. Yet this situation has led to public scrutiny and criticism from notable industry figures.
Manus AI, recently valued at $500 million, raised $75 million, but its investment is now under review by the U.S. Treasury due to concerns over compliance with restrictions on Chinese companies.
Benchmark's lawyers assert that Manus is compliant because it serves as a 'wrapper' around existing AI models and is incorporated in the Cayman Islands, distancing it from being China-based.
Criticism of Benchmark's investment came from Founders Fund partner Delian Asparouhov, who highlighted on X that investments have repercussions, suggesting ongoing scrutiny for venture investors.
Despite the favorable legal opinions, the fact that Manus AI's structure mirrors that of many Chinese firms raises questions about the implications of U.S. security regulations.
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