China's government last week confirmed that it will review Meta's $2.5 billion acquisition of Manus AI, whose core team last year relocated from China to Singapore.

Why it matters: This could signal an end to "Singapore-washing," a strategy that's helped a number of Chinese tech companies secure foreign investment and commercial contracts.

Catch up quick: Manus was domiciled in the Cayman Islands, but was otherwise a Chinese company when Benchmark led its $75 million Series B round last spring.

• That investment sparked some social media criticism from other U.S. venture capitalists, plus a reported Treasury Department investigation to determine if violated outbound investment laws.
• A source says Benchmark invested with the understanding that the startup's 100 or so China employees would move south, which they quickly did. Less than a year later, the company was acquired by Meta.

State of play: China's Ministry of Commerce said, in response to a reporter's question, that it will review "this acquisition's compliance with laws and regulations related to export controls, technology import and export, and outbound investment."

The big question: What China might do if it determines that there's been a violation or just wants to nip Singapore-washing in the bud.

• Meta's social media platforms are banned in the country, but it does generate significant revenue from Chinese advertisers. That money could be threatened.
• More problematic could be consequences for China-based family members of Manus employees. As one source familiar with the deal said: "You don't personally need to be in China for China to have a lot of leverage over you."

The bottom line: The regulatory rules for AI are being written and rewritten in real time.

WebAI, an Austin, Texas-based sovereign AI platform, raised "high double-digit" millions of dollars at a $2.5 billion pre-money valuation, Axios has learned.

Why it's the BFD: The idea is to run AI directly on devices, bypassing the cloud, for the sake of increased privacy, performance, and energy efficiency.

Zoom in: Marc Benioff's Time Ventures led the round, and was joined by Atreides Management and return backers like Forerunner Ventures.

• It's structured as a Series A extension, with plans to raise a larger Series B within the next quarter.
• The company began with corporate customers like Oura, but since has expanded into the public sector and plans to launch its own consumer-facing app.

The bottom line: "We want AI to run as close to where data is generated as possible, without having to rely on the cloud or a WiFi connection." — David Stout, webAI founder and CEO, to Axios

• JetZero, a Long Beach, Calif.-based developer of blended-wing aircraft, raised $175m in Series B funding. B Capital led, joined by United Airlines Ventures, Northrop Grumman, 3M Ventures, and RTX Ventures. axios.link/3LJg9e3

• Deepgram, an SF-based speech-to-text platform, raised $130m in Series C funding at a $1.3b post-money valuation from Alkeon, In-Q-Tel, Madrona, Tiger, Wing, YC, BlackRock, Alumni Ventures, Princeville Capital, Twilio, ServiceNow Ventures, SAP, Citi Ventures, University of Michigan, and Columbia University.

• Deepgram also acquired OfOne, an AI voice platform for the restaurant, QSR, and drive-thru markets whose seed backers included SignalFire.

• Defense Unicorns, a Colorado Springs, Colo.-based provider of airgap software delivery for national security mission systems, raised $136m in Series B funding. Bain Capital led, joined by Ansa Capital, Sapphire Ventures, Valor Equity Partners, AVP, Uncorrelated Ventures, and David Petraeus. axios.link/4qIvZV2

🚑 Proxima (fka VantAI), an AI drug discovery startup focused on proximity therapeutics, raised $80m in seed funding. DCVC led, joined by NVentures, Braidwell, Roivant, AIX Ventures, Yosemite, Magnetic Ventures, Alexandria Venture Investments, and Modi Ventures. axios.link/4qu7fjN

• Accelsius, an Austin, Texas-based provider of direct-to-chip liquid cooling solutions, raised $65m in Series B funding from Johnson Controls and Legrand. axios.link/3LCQxj3

• WithCoverage, an NYC-based startup that replaces insurance brokers with a flat-fee risk management model, raised $42m in Series B funding, per Axios Pro. Sequoia Capital and Khosla Ventures co-led, joined by 8VC and Crystal Venture Partners. axios.link/4aR688W

🚑 Juvena Therapeutics, a Redwood City, Calif.-based developer of a muscle-regenerating biologic, raised $33.5m in Series B funding. Bison Ventures led, joined by Eli Lilly, Jefferson Life Sciences, Mubadala Capital, and Manta Ray. axios.link/458bTLI

🚑 Converge Bio, a biotech AI platform, raised $25m in Series A funding from Bessemer Venture Partners. TLV Partners, and Vintage Investment Partners. axios.link/49EdOZT

🚑 Trailhead Biosystems, a Cambridge, Mass.-based regenerative medicine biotech, raised $20m led by MAK Capital. axios.link/3NfwYOh

• VelaFi, a Dallas-based stablecoin financial infrastructure provider, raised $20m in Series B funding. XVC and Ikuyo led, joined by Alibaba, Planetree, and BAI Capital. axios.link/4aQeNse

🚑 Nuclera, a British protein manufacturing platform, raised $12m in Series C extension funding led by insider Elevage Medical Technologies. axios.link/49RuHl3

🚑 RISA Labs, a developer of oncology AI agents, raised $11.1m in Series A funding led by Cencora Ventures and Optum Ventures, per Axios Pro. axios.link/4aWsfLh

• Klearly, a Dutch payments platform for hospitality, raised €12m in Series A funding. PayPal Ventures led, joined by Italian Founders Fund and insiders Global PayTech Ventures, Antler Elevate, and Shapers. axios.link/3Nb2XiJ

• Haiqu, an NYC-based quantum software startup, raised $11m in seed funding. Primary Venture Partners led, joined by Qudit Investments, Alumni Ventures, Collaborative Fund, Silicon Roundabout Ventures, Angel One Fund, Toyota Ventures, and Mac Venture Capital. axios.link/3NgN2PL

• Dataroid, an Istanbul-based analytics platform, raised $6.6m led by Tacirler Asset Management, with participation from the Tacirler Asset Management Future Impact VC Fund, and Endeavor Catalyst. axios.link/3NjDKT5

🚑 Avenue Biosciences, a Finnish protein engineering technology company, raised $5.7m in seed funding. Balnord and Tesi led, joined by Voima Ventures, Inventure, and the University of Helsinki. axios.link/4aXUh9e

🚑 Allos AI, a U.K. startup focused on applying causal AI to drug reformulation, raised $5m in seed funding. Oxford Science Enterprises led, joined by Habico Invest and Berkeley Skydeck. axios.link/4sxNtFH

• Neuramint, a Denver-based developer of an AI agent platform, raised $5m in seed funding from Maelstrom, Borderless Capital, Selini Capital, Symbolic Capital, Lattice Fund, and Node Capital. axios.link/4qoDCQU

• Bricks.sh, an Italian internal tools builder, raised €1.6m in pre-seed funding led by Primo Capital. axios.link/4qIVe9Y

• Arlington Capital Partners acquired Pond & Co., a Peachtree, Ga.-based engineering and architecture consultancy, from DC Capital Partners. axios.link/3Lwamsi

• Aurex, a Godspeed Capital portfolio company, acquired Alpha 2, a provider of cryptographic engineering and cybersecurity services for the U.S. space, defense and intelligence communities. axios.link/4aQ9j0B

🚑 Behavioral Framework, a portfolio company of Renovus Capital Partners, acquired Autism ETC, a Nashville-based provider of applied behavior analysis therapy and autism diagnostic services. axios.link/3NGXb8s

🚑 Corilus, a portfolio company of PSG Equity and Rivean Capital, acquired Sofia Développement, a rival providers of health-care software for outpatient professionals. axios.link/3LDa4jc

• Flix, a German travel-tech company whose backers include EQT and TCV, acquired a majority stake in Flibco, a European airport shuttle operator, from SLG (which retains a minority stake). axios.link/4jJiQZU

• Inflexion acquired Ascend Broking Group, a British commercial and health-care insurer, as the first deal in a new insurance broker rollup strategy. axios.link/4qibUFg

• Net at Work, a Lovell Minnick Partners portfolio company, agreed to acquire LLB Partners, a Glenside, Pa.-based ERP consultancy. axios.link/3LrcVvO

• O'Hara's Son Roofing, a portfolio company of Angeles Equity Partners, acquired CP Rankin, a Chalfont, Pa.-based provider of commercial roofing services. axios.link/4ql722v

🚑 ORTEC, a Dutch portfolio company of Battery Ventures, acquired Klages & Partner, a German provider of clinical staff management software. axios.link/49zGvHw

• Rampart Exterior Services, a Huron Capital portfolio company, acquired Colorado Moisture Control. axios.link/3LxvDBK

• Sole Source Capital acquired Brite, a Victor, NY.-based cybersecurity and managed services provider. axios.link/4jCpKQw

• Summa Equity acquired Peoplesafe, a U.K. workforce safety provider, from ECI Partners. axios.link/4pCI79h

🚑 Zelis, a Boston-based health care IT company owned by Bain Capital and Parthenon Capital, acquired Rivet, a Boston-based revenue cycle analytics startup. axios.link/4qUUvTe

• EquipmentShare, a Columbia, Md.-based construction equipment rental company, set IPO terms to 30.5m shares at $23.50 to $25.50. It would have a $6.7b fully diluted valuation, were it to price in the middle, and plans to list on the Nasdsaq (EQPT). The company raised over $500m from firms like Insight Partners, BDT & MSD Partners, and Romulus Capital. axios.link/3Ls27gY

• KRAKacquisition, a digital assets SPAC backed by Kraken, Tribe Capital, and Natural Capital, filed for a $250m IPO. axios.link/4jGD3PS

• Blackstone hired Goldman Sachs and CBRE to sell Leaf Living, a U.K. rental home business that could fetch more than £1b, per Bloomberg. axios.link/4pwDL3r

🚑 Boston Scientific (NYSE: BSX) agreed to acquire Valencia Technologies, a Santa Clarita, Calif.-based maker of implantable device for treating overactive bladder disorder.Valencia had raised over $60m from firms like Brooks Management Group, Inspire Global Ventures, and Blackbrook Management Group. axios.link/3LvVt9p

🚑 Hippocratic AI, valued by VCs at $3.5b, acquired Grove AI, an SF-based developer AI agents for pharma that raised nearly $5m in a seed round led by A*. axios.link/3L9Q4os

• Juggernaut Capital Partners sold Go Raw, a seed-based snacking brand to the family office of Uday Kotak, founder of India's Kotak Mahindra Bank. axios.link/49ywKJn

• OpenAI acquired Torch, a startup that unifies lab results, medications and visit recordings, for a reported $100m in stock. Torch backers included WestCap. axios.link/4qOYGzN

• Polygon Labs agreed to buy both crypto payments firm Coinme and crypto infrastructure startup Sequence for over $250m. Coinme raised around $38m from Pantera, Digital Currency Group, Coinstar, Circle, and MoneyGram. Sequence backers include Brevan Howard Digital, Initialized Capital, Coinbase, Polychain, Consensys, Take-Two Interactive, Ubisoft and Bitkraft. axios.link/49EqPCJ

🚑 Smith & Nephew (LSE: SN) agreed to buy Maple Plain, Minn.-based Integrity Orthopaedics for upwards of $450m. It previously raised over $20m from firms like Piper Sandler. axios.link/3ZaZqn2

• Diageo (LSE: DGE) hired Goldman Sachs and UBS to consider options for its Chinese assets, including possible divestment, per Bloomberg. axios.link/3NkODEc

• US Bancorp (NYSE: USB) agreed to buy SF-based brokerage BTIG for up to $1b. axios.link/3LKEEaP

• Arcano Partners of Madrid raised €850m for its fifth PE secondaries fund. arcanopartners.com

• Clayton Dubilier & Rice is seeking $26b for its next flagship fund, per Bloomberg. axios.link/3Z8nuXH

• Coller Capital raised $17b for its ninth flagship PE secondaries fund. axios.link/3Lgm769

• Dharana Capital raised $250m for its second India-focused growth equity fund. axios.link/3NePmqx

• TrueBridge Capital Partners is raising up to $275m for its fourth direct VC fund. axios.link/4sAXtOl

• Brighton Park Capital promoted Logan Gregoire to principal and Michael Everett to vice president. axios.link/3LDESR0

• Sergio Ermotti plans to step down next year as the CEO of UBS, per the FT. axios.link/4qhH5k1

• Nadine Fattah (ex-Alpine Investors, G9 Ventures) and Anja Zehfuss (Longitude Capital) joined CRV as investors. crv.com

• Elaia promoted Alexis Frentz to partner. axios.link/3YCom6J

• Marian Fowler joined Gibson Dunn as a partner in the law firm's investment funds practice. She previously was general counsel and chief compliance officer at Thrive Capital. axios.link/4sCkMav

• Gary Gallagher was named president of iCapital. He previously led strategic biz dev for Fidelity Institutional. axios.link/3NtUfvT

• GHK Capital Partners promoted John Luke and Lucas Viola to principals, Taylor Peck to SVP, and Joseph Brogan and Luke Morrison have been promoted to vice presidents. axios.link/3Yyl8Bj

• HighPost Capital promoted David Weston to senior managing director of the firm's buyout and late-stage growth efforts. axios.link/45FP6Hj

• Leeds Equity Partners promoted Olivia Caccia and William Teplitz to vice presidents and Danielle Klimchak to chief administrative officer. axios.link/3Z4XjkG

• Odyssey Investment Partners promoted Henry Bendit to managing principal, Spencer Marks and Tyler Miller to vice presidents, and Eitan Lewittes and Isabelle Lotocki to senior associates. axios.link/49iK1Hd

• PSP Capital promoted Mike Oleshansky to managing director and head of PSP Capital, Peter Berghoff and Don Traubert to managing directors, and Lauren McNamara to senior associate. psppartners.com

• Dominik Simler joined All Seas Capital as a senior advisor. He previously was a partner and head of DACH at L-GAM Advisors. axios.link/4sTPnRd

Inflation rose 0.3% in December, and 2.7% year-over-year, matching both November's number and economists' expectations.

• Core CPI, which strips out food and energy, was slightly cooler than expected, coming in at 0.2% for the month and 2.6% year-over-year.
• Go deeper.