Speaker 1: we thought it was a done deal, but beijing just issued a 2,000,000,000 return to sender notice on meta's biggest ai play of the year. if you thought a singapore office was enough to escape china's regulatory, uh, reach, the manus block just rewrote the rules for the entire globe tech industry. so Speaker 0: we Speaker 1: all heard about the $2,000,000,000 deal where meta bought their chinese, uh, company manus. yeah. china's ndrc has ordered meta to fully unwind its $2,000,000,000 purchase of ai startup manus despite the company being incorporated in singapore. regulators ruled that because the tech was born in china, it remains a national asset under strict export controls. so this effectively kills singapore washing, which is a strategy of moving chinese startups offshore to facilitate us sale and declares that ai talents talent itself is now restricted government export. and this is kind of a big deal because a lot of people have been paid. you know, people have moved. they, uh, some people have been laid off. um, people have moved into the other offices. investors in manus have, uh, got their money and cashed out. and all of a sudden, everyone's saying, okay. no. no. no. everybody's gotta put everything back. all those deals gotta go back, and everything's gotta be unwound. and so it's not simple because, you know, the deal was done back in january and sorry, december. and then the, uh, and the china's ndrc started investigation in january. so now that they've come up with this deal, uh, meta said they were gonna try and fight it, but it looks less and less likely that that's gonna happen. what do you think about this, john? Speaker 0: yeah. um, uh, this is this is so it's funny that and i'll probably get hacked by china for this, but, like, it's funny that that, um, china can pick and choose whether when it decides whether or not a company is is linked to china. think about the tiktok deals and all that sort of stuff where, uh, bytedance was based in singapore, but china said, oh, no. no ties to china, and they all said no ties to china. but yet, this is the same kind of thing where there is a company in singapore and there's ties to china, and now they decide, oh, yeah. these are ties to china. so, um, this is a complex, unprecedented kind of move from from from what i understand. um, so the deal has already progressed. like you said, uh, code bases and models were partially integrated already. employees had transition roles. intellectually intellectual property had been shared. and so reversing it is gonna require re separating ai models and training data, reassigning or relocating engineering teams, untangling licensing and ownership rights. like, it's this is gonna be technically legal, uh, technically and legally messy. and, um, it's it's it's absolutely nuts. the other thing too is that, like, this is gonna set a precedent. right? because this isn't a one off. so future deals involving chinese origin ai companies are going to face mandatory security reviews. even minority investments could be blocked. and so there's gonna be slower cross border m and a, which is merger and acquisitions. there's gonna be more joint ventures instead of acquisitions. there's potentially increased geopolitical friction in ai. um, like, there's a lot that, um, that there's a lot that that could, uh, that could be affected by this. and, uh, china didn't just block the deal. it actually reportedly restricted founders' travel and investigated personnel movements. so, um, i guess, china's saying that in ai, the engineers are the asset, not just the product. so, um, this i can't say i'm surprised that china did this, but, yeah, what are your what are your thoughts on this? i know you kind of introduced this. what do you think about this? Speaker 1: um, i guess it's just kinda getting to the point of we're trying to the world is changing, and what is a strategic company asset has changed or country asset. so whereas i think a few years ago, people wouldn't have batted an eye at this, the world has changed, and we realize that ai, whoever loses the ai battle loses the world as it were, um, on the military, uh, front. and they don't want, um, any of these ai stars or companies or assets to leave. you know, i don't know if, for example, if openai was bought for china, would the us allow it to go through? Speaker 0: probably not. Speaker 1: yeah. well, look what we did Speaker 0: with tiktok, and that's not that's just, like, videos and stuff. right? but that's the thing. so there's deeper things to that tiktok thing than than just what's on the checklist. Speaker 1: it's more user data and stuff, but that's a whole other, uh, question. so Speaker 0: deeper reasoning behind it besides the user data is what i'm saying, but we don't have to get into it. Speaker 1: so think of this update like trying to sell a custom built supercar. you might have moved the car to a garage in singapore, changed the license plate, but the country where the engine was designed and master mechanics live, it just stepped in and said, it's our proprietary engineering. you can't sell it to a rival team no matter where the garage is located. so the unwind order was, uh, issued april 27 just a few days ago. ameda has preliminary deadline of several weeks to comply. the cost, like, uh, i think we mentioned was 2,000,000,000 to $2,500,000,000 deal. is currently in legal in inbox because meta faces a a massive write down if they can't recover the costs, um, if people don't cooperate on the other end. so, um, manus ai agents, uh, which were being integrated in meta's ecosystem are now legally frozen for us global users, so, uh, they can't use them. uh, i don't know. i i think of this as two ways. you know, people starting to draw countries starting to draw a line, and second, meta can't get a break. Speaker 0: yeah. i know. Speaker 1: they did yeah. you know, whatever they tried to do never quite works out. you know? they just gave up on the metaverse after $80,000,000,000 worth of investment. Speaker 0: they haven't given up on the metaverse, by the way. yeah. yeah. there's more money being spent on it than i just read about. so we can cover that another day. but yeah. Speaker 1: agreed. but it's a lot less than it used to be. i think what happens is some companies jump the gun on how ahead this technology is gonna be. and the virtual three d world has been promised to us for, you know, twenty five years. Speaker 0: yeah. Speaker 1: and we're we're just not there yet. but, you know, maybe in the next twenty. anyway, that's a separate story. my point being is they can't catch a break because this was, uh, manus is a great product, and it would compete with, like, opencloud, cloudcowork, and a lot of these other tools. at one point, it was the leader. now cloudcowork came out after this and all that, and i haven't gone back to look at manus and compare the two. but manus was definitely a leader in the industry for a while, um, and this gave meta a leg up as they started integrating this technology ahead of many of the others into their platform as everyone's trying to be the developer platform of choice as well as the ai builder platform of choice to get dominate that market. and meta just, you know, loses this deal. they're everyone's using their, uh, llama models for their own stuff, um, which is all open source models. i it'll be interesting to see where they pivot to because their ai, except for the base models, which everyone uses, no i don't see too many people using their flagship models. so we don't know what's i don't know what's happening there. um, and they're not they're never in the conversation. Speaker 0: no. no. they're not. and here's the other thing too. it's so this is like, the way that china's approaching this, it's essentially setting ai as officially a sovereign asset class because it's confirming that ai is now treated like semiconductors, energy infrastructure, and defense systems, which isn't which isn't surprising. right? um, and both the us and china are restricting cross border investments. they're blocking acquisitions. they're controlling talent movement. so it's a shift from because we were going we were this, uh, at one point, uh, we were becoming more globalization, and it's becoming more tech is becoming more of a nationalism type type of thing now. would you agree? Speaker 1: well, i think absolutely. i think covid proved one thing to come trees that they need to be able to produce their own medicine in a crisis, that they need to produce some of these things that they currently, at a globalization, outsourced to other countries because it's cheaper, faster, more efficient at a global scale. all the things when global's in harmony, but then you have a crisis and every country is vying for the same stuff, and you got we got to see that where everyone's, uh, vying for the, uh, vaccines. now we live in a fragmented world of hostility. we don't know who's gonna be on whose side in a iran confrontation, in a ukraine confrontation, in a otherworldly converse other other areas of the world going on. and as the cold war or whatever actual war heats up, these businesses are starting to, uh, break themselves apart because they can be shut down overnight. this is the most aggressive use of the china's foreign investment security review. it's for its, um, version of cifas since the 2020 inception, marking it the first time, uh, completed ai deal has been forced to full unwind. Speaker 0: yes. yeah. Speaker 1: so the rule yeah. go ahead. the ruling hinges on legal doctrine, ai talent as a technology export. it means moving a team of engineers to a foreign office can now be legally classified as smuggling intellectual property. manus' parent company, butterfly effect, attempted to desyanize by wiping the chinese social media and blocking chinese ip address months before the meta deal was announced, but, you know, that didn't help. the two founders are currently under exit bans in china. they were summoned for questioning in march 2026 and haven't been allowed to leave since. so we'll keep an eye on this, but it looks like that deal's done, and we're not gonna see too much technology from china, i don't think, coming to the west from a investment or ownership point of view anytime soon. Speaker 0: yeah. Speaker 1: let us know what you think. trying to just prove that in the ai arms race, the engineers are just as regulated as the engines. does china have the right to claim ownership over talent just because they were trained there, or is it a massive overreach that will stifle global innovation? let us know what you think in the chat.