Last week, Chinese AI startup Monica sent shockwaves through the U.S. and Europe with the launch of its autonomous agent program, Manus. The release has raised concerns among investors that Western companies could fall further behind in the rapidly evolving AI race.
Earlier this year, another Chinese AI startup, DeepSeek, surprised the industry by launching a high-performing chatbot at a fraction of the cost of major competitors. Its success forced European startups to rethink their strategies, spooking investors who saw how quickly China was advancing in AI technology.
According to Sifted data, venture capital investment in AI has surged in early 2025. In just the first two months, over €600 million has been funneled into the sector—already surpassing a third of the total €1.7 billion raised in 2024. Among notable funding rounds, Legaltech Luminance secured $75 million, while emerging AI-driven coding startup Lovable raised $15 million.
The “DeepSeek Moment” for AI Agents
With AI agents—software programs capable of executing complex tasks independently—gaining momentum, Manus’s capabilities have sparked industry-wide discussions, with some calling it a second “DeepSeek moment.”
Greg Nieuwenhuys, a senior partner at Generative AI Strategy, emphasized the significance of Manus, stating: “Manus represents a major step forward in AI autonomy, marking yet another breakthrough from China.”
Viral posts on social media platform X showcase Manus performing advanced tasks, such as:
- Conducting a detailed analysis of Tesla stock
- Browsing the web to plan a two-month world tour
- Creating a personalized website based on a user’s social media profiles
However, concerns are mounting about Europe’s ability to keep pace. Nieuwenhuys warns: “Europe currently lacks an equivalent AI agent project with the same level of autonomy. This raises serious questions about long-term competitiveness. Without strong investment and government-backed initiatives, Europe risks falling behind in the AI race.”
Manus A Competitive Challenge for European AI Startups
Despite the excitement surrounding Manus, some critics point out its flaws. Reports indicate occasional lagging performance and factual inaccuracies. Investors are approaching with caution, waiting for the hype to settle before making big moves.
Sebastian Hunte, investment manager at AlbionVC, believes it’s still too early to assess its true impact: “While Manus is not perfect, it has clearly delivered early value across a range of tasks. This will put increasing pressure on European AI developers like Convergence and Mistral. The global standard for speed and execution quality has just been raised again.”
Meanwhile, Yi Luo, cofounder of AI-powered fintech Eunice and an active European angel investor, believes Manus’s real innovation lies in its product execution, rather than a fundamental technological leap:
In January, DeepSeek’s launch temporarily caused market fluctuations for Nvidia, Microsoft, and Amazon, though stock values rebounded quickly as the competition further fueled demand for AI services.
Sam Nasrolahi, principal at InMotion Ventures, stresses the importance of scalability and user experience over short-term hype: “While DeepSeek and Manus show promise, we try not to get caught up in the buzz before thoroughly assessing their long-term scalability and ecosystem impact.”
Nasrolahi also notes that these new AI agents are forcing a reevaluation of key industry factors, including:
- Pricing models and cost estimates
- Interoperability between AI systems
- What truly constitutes a defensible competitive advantage in AI
As China continues to make rapid advancements, the global AI arms race is intensifying, and Western startups must step up their game to remain competitive in the ever-evolving landscape.
