China is restricting top AI firms including Moonshot, StepFun, and ByteDance from accepting U.S. investment without government approval

Chinese regulators including the National Development and Reform Commission have told several high-profile AI companies including Moonshot AI, StepFun, and ByteDance to reject U.S.-origin capital in funding rounds unless explicitly approved by the government, as part of Beijing's response to Meta's $2B acquisition of Chinese AI startup Manus, which triggered a probe into illegal foreign investment and tech exports. The restrictions are aimed at preventing U.S. investors from taking stakes in sectors deemed national security priorities, and come as Beijing simultaneously moves to restrict red-chip firms from seeking IPOs in Hong Kong, cutting off two of the main channels through which Chinese tech companies have historically accessed foreign capital. The Manus deal, which was initially seen as a template for Chinese startups with global ambitions, became controversial after critics argued it represented a loss of valuable AI technology to a geopolitical rival, with Manus co-founders reportedly barred from leaving China while the probe continues.