00:00China's recent regulatory action against AI startup menace could weaken Southeast Asia's role as a neutral hub for cross-border
00:08AI investment and tech partnerships, according to an expert.
00:11Gavical Technologies Laila Kawaja says the case shows Beijing no longer views offshore corporate structures as outside its regulatory reach.
00:21I think this decision will not stop cross-border AI deals, but it will definitely raise the bar really significantly,
00:30especially in Southeast Asia, which has been a very popular destination for Chinese companies seeking to access global capital and
00:39global market because Southeast Asia was considered like a place of geopolitical neutrality amid intensifying frictions between the U.S.
00:47and China.
00:48So I think the Manus decision basically shows that this neutrality argument is no longer valid.
00:54So I think the immediate impact is likely going to be reduced investor sentiment, and I think this goes both
01:01ways.
01:02Her remarks follow China's decision to block Meta's proposed acquisition of Manus, an AI startup founded by Chinese entrepreneurs and
01:11later based in Singapore.
01:12Chinese regulators cited national security concerns and ordered the deal to be reversed before it could proceed.
01:19Kawaja says Beijing likely viewed Manus as prioritizing commercial interests over China's broader national and strategic priorities.
01:28So Manus used local engineers, local data, and also received substantial support from the Beijing government.
01:35So even though Manus cut its China ties later on, including moving its headquarters to Singapore, kind of cutting all
01:43the China business and then firing all the China staff, it does not really remove its early Chinese roots.
01:50So I think in this case, Beijing most likely sees Manus as attempting to maximize its own commercial interest at
01:59the expense of China's national interest.
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