Butterfly Effect, the AI startup behind Manus AI, relocates from China to Singapore amid U.S.-China geopolitical tensions. Learn how this move impacts its global expansion and AI innovation.
Singapore – Butterfly Effect, the innovative AI startup powering the Manus AI agent, has shifted its headquarters from China to Singapore, a strategic move driven by escalating geopolitical tensions and a vision for global expansion. Announced by co-founder and chief product officer Zhang Tao at the SuperAI conference in Singapore on June 18, 2025, this relocation positions Butterfly Effect to navigate U.S.-China tech rivalries while targeting growth in key markets like the U.S., Japan, and the Middle East.
Why Butterfly Effect Moved to Singapore
The decision to relocate to Singapore stems from mounting geopolitical pressures, particularly U.S. export controls on advanced semiconductors, such as Nvidia chips, critical for AI development. These restrictions have created significant hurdles for AI companies in China, prompting Butterfly Effect to establish its global base in Singapore, a neutral and business-friendly hub. The company’s website now prominently lists Singapore as its headquarters, with plans for additional offices in Tokyo and California.
This move aligns with a broader trend of Chinese tech firms seeking to mitigate risks tied to U.S.-China tensions. Singapore’s strategic location and robust tech ecosystem make it an ideal base for Butterfly Effect to access global markets and talent, ensuring the company remains competitive in the fast-evolving AI industry.
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Geopolitical Tensions and AI Development
U.S. sanctions on advanced chip exports have disrupted the AI landscape in China, pushing companies like Butterfly Effect to rethink their operational strategies. While some reports suggest the relocation may ease access to Nvidia’s cutting-edge chips, Butterfly Effect has clarified that its focus on AI agents, rather than resource-intensive large language models, reduces its dependence on such hardware. This strategic pivot allows the company to prioritize innovation and scalability in a geopolitically sensitive environment.
Workforce Restructuring and Hiring in Singapore
As part of its relocation, Butterfly Effect has scaled back its China operations, with reports indicating a significant reduction—or complete closure—of its China-based workforce. Approximately 120 employees remain in China, while the company is aggressively hiring in Singapore for roles like data analysts and AI engineers, offering salaries between $8,000 and $18,000 per month. This shift underscores Butterfly Effect’s commitment to building a global team to support its ambitious growth plans.
Funding Fuels Global Ambitions
In April 2025, Butterfly Effect secured a $75 million funding round led by U.S. venture capital firm Benchmark, valuing the startup at $500 million. This financial boost has empowered the company to accelerate its global expansion, with a focus on penetrating markets in the U.S., Japan, and the Middle East. The funding also supports Butterfly Effect’s efforts to enhance Manus AI, positioning it as a leading AI agent in a competitive landscape.
Manus AI’s Market Performance
Since its invite-only launch in March 2025, Manus AI has attracted significant attention, peaking at 20 million monthly active users. However, user engagement has declined to around 10 million by May 2025, as Chinese tech giants like ByteDance and Baidu intensify competition. Despite this, Butterfly Effect remains optimistic, leveraging its Singapore base to attract new users and refine its AI offerings.
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A Growing Trend in the AI Industry
Butterfly Effect’s relocation reflects a broader shift among Chinese AI startups seeking to distance themselves from geopolitical risks. By establishing a presence in Singapore, the company aims to position Manus AI as a global leader, unhindered by U.S.-China tech disputes. Industry experts view this move as a strategic blueprint for other AI firms navigating similar challenges.
What’s Next for Butterfly Effect?
As Butterfly Effect settles into its Singapore headquarters, the company is poised to capitalize on its new global positioning. With fresh funding, a growing international team, and a focus on AI innovation, Manus AI is well-equipped to compete in the global market. The tech world is watching closely to see how this relocation shapes the future of Butterfly Effect and its role in the AI revolution.