The Most Moving AI Investment Story of 2025

@Jing Liu

I once posted on social media, something to this effect: a friend had become famous in the AI wave and had to do some interviews. After each one, he'd check in with us to report what he'd said. It was exactly like confessing after cheating on someone.

That person was Yuan Liu.

Because of his investment in Xiao Hong and Manus, Yuan Liu is becoming a hot commodity among investors. But for the longest time, this ZhenFund partner had been tormented by the fact that he had "no thunderbolt of a portfolio company." When getting together with close friends, he'd even mock himself: "My friends always tease me — what makes you think you deserve to be a partner?"

Though sometimes he'd explain that promotions at ZhenFund are strictly numbers-driven, that glass is fragile, and some companies he'd once invested in had soared only to fizzle out.

Writing about Yuan Liu was a plan long delayed. At first, I wanted to wait for Momenta — an early investment of his — to go public. Later, I said I'd wait until his ten-year anniversary at ZhenFund. But either timing shifted, or he himself backed out. Until Manus came along, and he grew anxious again: would this be popping the champagne too early?

The inner drama of a literary youth — rich and mercurial, as expected. elsewhere decided to ride the video podcast trend, and only then did Yuan Liu agree.

Many people close to Yuan Liu know he's a romantic, kind, and sentimental person. But this has still been an emotionally volatile year for him.

Reading a media retrospective on how Manus's three co-founders connected with ZhenFund, he seemed to see his own repeatedly practiced people-investing techniques gradually imprinted with the reflection of Bob Xu's years of oral teaching — and he cried.

When Manus first launched, he accompanied Xiao Hong to meet investors, nominally there to help translate. The other side had just asked their first question, "How did your story begin?" — and he cried.

Looking back at letters he'd written to Bob Xu over the years, seeing those words of unfulfilled ambition, of feeling he'd failed his mentor — he cried again.

A rough count: in Yuan Liu's rapid notes, "cry" appears 16 times. But also — "hahaha" appears 43 times.

To avoid too many spoilers, I won't show the full conversation transcript here. We've distilled ten stories from this conversation. For more, please head to the Xiaoyuzhou App for the full audio version, and the full video version at the end of this article. You'll find the most complete story of Manus to date, Yuan Liu and Xiao Hong's nearly decade-long marathon, and an inner world that few investors would openly confess.

The main text follows:

The Feeling of Growing Up Overnight

Regarding that highly controversial Manus product launch video, Manus co-founder Zhang Tao recently at a ZhenFund-Tsinghua event — where he happened to have a dialogue with Yusen Dai — publicly recounted the launch for the first time. But Yuan Liu's telling is more complete.

On the morning of March 6, when the video was spreading most explosively, Yuan Liu was sleeping in. When he woke up, he found that the bottom of his WeChat no longer showed a number, but three red dots — indicating just how many messages there were.

This detail is itself telling: even as Manus's closest investor, he had no expectation of what was happening. He'd experienced similar moments before, but most products merely generated buzz within the industry.

Many people fixated on: whether PR fees were spent throughout the process, whether the invite codes were hunger marketing, and so on. None of this is the most important. What's probably more important: whether Manus was consciously riding DeepSeek's traffic and user sentiment.

Yuan Liu says, if people call you the second DeepSeek, you might say "oh no, I wouldn't dare," but you'd definitely be happy inside — though there's no need to ask for takedowns of such articles.

At the time, a wave of articles did emerge with titles like "Silicon Valley Sleepless All Night!" "AI Earth-Shattering Change!" "OpenAI Is Really Panicking!" As someone sensitive to language, Yuan Liu says he found them hilarious, and screenshotted many to send to Xiao Hong.

But with emotions layered upon emotions, Manus was quickly branded as over-marketing. In Yuan Liu's view, Manus enjoyed only three days of glory, followed by prolonged criticism. Yet for a long time, from Xiao Hong to the Manus team, no one explained anything externally.

Even Yuan Liu, someone who loves posting on social media, was unusually silent during that period. At one point, he had a feeling of growing up overnight, suddenly understanding why so many big shots stay silent.

It was a judgment after weighing all pros and cons: not explaining might be the best explanation.

Ten Years Like One Week, One Week Like Ten Years

Yuan Liu always reminds me of Leonardo DiCaprio. Not the Jack from Titanic, but the one by the pool: unruly yet with some pitiable dishevelment. Listening to Yuan Liu tell the Manus story also feels like frames of a film.

When fighting alongside the Manus team, ZhenFund colleagues — including Yuan Liu — wore freshly made Manus T-shirts underneath, layered with a Patagonia bearing the ZhenFund logo. Yuan Liu once posted on Jike: "How can you say we have no clothes? We share our robes."

The ZhenFund investors stationed at Manus's office did things seemingly no different from interns: emailing Silicon Valley bigwigs one by one, inviting them to experience this product created by a Chinese team. During that time, Anna Fang would bring barbecue and beer to the scene.

Until a few days later, Silicon Valley truly woke up. Twitter founder Jack Dorsey retweeted. Stripe founder Patrick Collison retweeted. YC CEO Garry Tan retweeted. Someone in Manus's office shouted and then cried.

Yuan Liu says, for Manus, this was a feeling of cleared injustice.

And facing Xiao Hong in battle mode, Yuan Liu specially gave him a Churchill poster — bought at Churchill's wartime command room in the UK. Xiao Hong excitedly ran around the office, taking photos with colleagues.

In 2011, Yuan Liu began investing; in 2014, he joined ZhenFund as an angel investor.

ZhenFund managing partner Yusen Dai told him, this week was like that Lenin quote: "There are decades where nothing happens, and then there are weeks when decades happen."

"How can you say we have no clothes? We share our robes."

All Fairy Tales Have Endings

One early morning, in a car home from Manus. Yuan Liu took out his phone to message Anna Fang, recounting in detail his years-long story with Xiao Hong.

Yuan Liu's nearly ten years of investing in Xiao Hong — only slightly shorter than his entire tenure at ZhenFund, becoming a partner. In one moment, Anna Fang suddenly looked at Yuan Liu and said: good stories all end, you know that, right?

All companies die, just as all people die. This is of course something everyone understands. It's just that Yuan Liu, still full of joy at the time, hadn't yet thought of what followed.

At ZhenFund, Anna Fang is often called "Zhen Mom." Compared to Bob Xu's romanticism, she was the one who once insisted on distilling people-reading into XX rules. But in this moment, she too became sentimental.

Or perhaps simply because she had experienced more companies' rises and falls than Yuan Liu. And understood better that all fairy tales have endings.

The Secret Behind Every Name

As a founder, Xiao Hong's naming of each company has real flavor.

The original Nightingale Technology. The nightingale is from Wilde's The Nightingale and the Rose, because in the fairy tale the nightingale is a helper, and what Xiao Hong wanted to build then was a good tool to help everyone.

Later, Monica. Xiao Hong was then building a browser extension, and many shortcut keys in browsers were already taken — M wasn't; he also wanted a person's name, and thought of "Monica" — easy to say and write. The name was long thought to be connected to Monica from Friends; actually, no.

Manus's naming has even more to it. The team initially had several candidates, among which Xiao Hong himself most liked Dodo — a catchy, cute animal image. But Anna Fang said no, because besides dodos being extinct, in English "dodo" is sometimes used to call someone stupid. Another choice: Vida, whose root is vitality.

But ultimately, everyone voted for Manus. This is a Latin word meaning "hand."

The dinner where Peak decided to join

More Alluring Than Carry in Investing

Yuan Liu has invested in over a hundred founders, but few with whom he's been as sticky as with Xiao Hong.

He and Xiao Hong have too many similarities. For instance, they have similar language habits: both love using tildes or exclamation marks on WeChat; as men, they lean closer to cute than rugged; they both crack up at references others might miss but they can identify.

Moreover, Yuan Liu is from Wuhan, and Xiao Hong is one of the few founders rooted in Wuhan. So every time Yuan Liu returns home, they meet, and Xiao Hong has met nearly all of Yuan Liu's family — even including his grandfather and uncle, drinking baijiu and eating crayfish with them during holidays.

Yuan Liu has witnessed all of Xiao Hong's disheveled moments. The once-very-fat him, the once-nearly-depressed him, the him repeatedly rejected in fundraising.

Unlike many investors merely aiming for tomorrow, Yuan Liu is an archaeology buff. He loses himself in past events, even those unrelated to him. So one can imagine how much he now savors these stories with Xiao Hong.

For some investors, this may be more attractive than carry.

Tears at Wujiaochang

Once, after Xiao Hong met with a top-tier VC he had high hopes for, he was rejected yet again. On the roadside at Wujiaochang, Xiao Hong cried. At this moment, a colleague who'd accompanied him suddenly ran over and said: stop crying, stop crying. Xiao Hong thought there was a turn in fundraising. Unexpectedly, the colleague said: two clients are here.

Many years later, Xiao Hong told this story to Yuan Liu as a joke.

This is just one slice of Xiao Hong's repeated fundraising setbacks. Yuan Liu says, he roughly counted: over the years, he's pulled Xiao Hong into group chats with over 130 investors.

Often accompanying Xiao Hong in fundraising also gave him more reflection on the investment industry itself.

For instance, he couldn't understand: why would one investor find a $45 million valuation too high, and insist on $42 million — was that a meaningfully different number?

He couldn't understand: why would one investor, after hearing Xiao Hong's pitch, suggest he research an AI product — called Doubao. Then after Manus blew up, could frantically make 10 WeChat calls to Xiao Hong in a short time, repeatedly asking: "Mr. Xiao, are you there?"

He also couldn't understand: investors who theoretically should have critical thinking, why is their groupthink so powerful, why do most people always live in consensus?

A belated celebration for Nightingale Technology's acquisition, they opened a bottle of champagne —

actually to discuss a new startup with him

Literary Moments in Investing

Chatting with Yuan Liu often brings to mind a book — Reading Ruined Me. This is a work by ZhenFund's Wang Qiang. So it's no surprise that words many find inconsequential hold fatal allure for Yuan Liu.

A peer had us ask him: when evaluating an early-stage founder, what signals and details do you particularly watch for? Yuan Liu's first thought was: their choice of words.

For instance, he dislikes when people call companies "projects" — this sounds temporary, ephemeral. He even researched that some US VCs internally ban words like "deal" and "exit"; Benchmark Capital partners, when describing founders and companies, use words like "Oceanic" or "Ossification."

He thought this was a niche interest, until he once saw Sequoia Capital's US website. He noticed Sequoia has always emphasized how much they care about what vocabulary they use to express their values. At this moment, he wanted to tell those who disdain language: see, the masters are like this too!

One Fable and Countless Others

When talking with Yuan Liu about how to identify people who don't follow conventions, he recalled a story Bob Xu once told him.

It goes roughly: there's a national parrot competition, where every parrot tries to mimic various human voices. But do you know what the first-place parrot said? It said: "My god, there are so many parrots here!"

This is a fable-like story: when a parrot says this, it is no longer a parrot.

Yuan Liu remembers that Teacher Xu told him this story by voice message, and he even remembers the parrot-mimicking sound Teacher Xu made.

In Yuan Liu's accounts of Bob Xu, Anna Fang, Yusen Dai, and others, there are always countless such small stories. It's hard to imagine such stories appearing at any other fund.

And hard to imagine, at most other funds, someone like Yuan Liu could even exist, let alone rise from investment manager to partner.

The Subtle Traces of History

The place where elsewhere recorded video with Yuan Liu was a bar in Central Park.

One reason for choosing it: in China's investment industry, this residential complex near Beijing's Guomao is quite a landmark. It once housed large numbers of young investors — especially during the heyday of dollar funds.

With the industry's ups and downs, prices here have fallen considerably, and many have gradually moved away.

But so coincidentally, in 2023, when Xiao Hong decided to start Monica and discussed fundraising with Yuan Liu, it was at this very bar.

Even more coincidentally, the seat where Yuan Liu recorded video with us was the same seat he sat in that night.

That night at Alahouse

To Teacher Xu, Also to Myself

Back to before Manus. Yuan Liu, as a partner at what may be China's best early-stage VC, was often asked by some: what's your representative work?

In 2022, after visiting the then-retired Teacher Xu, on the flight back, Yuan Liu had some drinks and, with tears, wrote this:

"Over these years I've felt increasingly ashamed. In eight years, I haven't presented a proud work for you to introduce me with concision and thunderous force. This shame, in fact, perhaps peaked at the moment I was promoted to partner.

Since coming to ZhenFund, I've grown in the near-preferential sunshine and rain of Teacher Xu and Anna. If I achieve something, it's a complete closed loop of a gratitude-for-recognition story. If I don't, my role at ZhenFund is a favored eunuch in the palace.

This pain is understood only by the closest friends. I only hope that in days to come I can still find opportunities to go against the current and spur my horse on, hoping to bring you some surprises."

Cover image: on-site photography