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.