Chinese AI startup Monica has raised alarm bells throughout the US and Europe last week, with the release of autonomous agent program Manus prompting some investors to warn Western companies risk falling further behind.
Earlier this year, the surprise success of another Chinese AI startup, DeepSeek, forced a strategic rethink among some of Europe’s leading startups, after spooking investors with a chatbot built at a fraction of the costs incurred by industry leaders.
In the first two months of 2025, VCs have pumped more than €600m into the sector, according to Sifted data. That’s more than a third of the €1.7bn raised across the whole of 2024. Legaltech Luminance raised $75m and buzzy agentic coding startup Lovable picked up $15m.
As investors’ attention turns to the potential for AI agents, autonomous software programs capable of performing more complex tasks on a user’s behalf, Manus’s impressive capabilities have caused a stir — with some dubbing it a second “Deepseek moment”.
“Manus represents a major step forward in AI autonomy, marking yet another breakthrough from China,” says Greg Nieuwenhuys, a senior partner at Amsterdam-based consulting firm Generative AI Strategy.
Viral posts on social media platform X appear to show Manus competently performing an analysis of Tesla stock, browsing the web to plan a two-month around-the-world trip and build a personal website based on a user’s social media profiles.
“At present, Europe does not have an equivalent AI agent project with the same level of autonomy. This raises concerns about whether European AI firms can remain competitive in the long term,” says Nieuwenhuys.
“Without strong investment and government-backed initiatives, Europe risks being left behind in the race for AI leadership.”
Raising the bar
Despite the hype, Manus has already faced criticism online, with some users suggesting it regularly lags and sometimes makes factual errors when asked questions. Investors tell Sifted they’re waiting for the initial hype to die while they assess their next play.
“It’s too early to tell what the implications for Europe’s AI agent-makers are. While Manus is not perfect, it has clearly delivered early value to users across a range of tasks,” says Sebastian Hunte, investment manager at London-based. AlbionVC.
“This will continue to put pressure on European players like Convergence and Mistral […] The global bar for speed and quality of execution has once again gone up,” he added.
Yi Luo, cofounder of AI-powered fintech Eunice and among Europe’s most active angel investors, tells Sifted Manus’s innovation was on the product side, rather than “a fundamental tech leap” like DeepSeek.
“I’ve heard some bold claims, like how startups like Manus alone could wipe out 75% of YC 2025 AI agent startups before they even launch,” she says. “If you’re just wrapping OpenAI calls without deep workflow automation, vertical expertise or proprietary data — your days are numbered.”
In January, the release of DeepSeek caused momentary slides in Nvidia, Microsoft and Amazon shares — but losses were quickly regained, with the fresh competition only intensifying demand for AI services.
Sam Nasrolahi, principal at InMotion Ventures, tells Sifted that while DeepSeek and Manus show great promise, “We try not to get sucked into the hype too readily, before greater consideration is given to scalability and user experience.”
“For releases like Manus or DeepSeek, we carefully consider their impact on the broader ecosystem. Whether it’s upending pricing models and cost estimates, bringing a greater focus to model interoperability, or rethinking what a true, defensible moat is in this space.”
Sifted approached Monica for comment.
Read the orginal article: https://sifted.eu/articles/manus-ai-china-chatgpt-claude-llm/
