Meta's $2B AI Deal for Manus Faces Scrutiny from Beijing
Chinese authorities are reviewing the acquisition of the AI startup, citing technology export control rules and creating a new geopolitical hurdle for the tech giant.
Meta Platforms Inc.'s (META) multibillion-dollar acquisition of the artificial intelligence startup Manus is facing an unexpected review from Chinese authorities, introducing a significant geopolitical complication to a deal aimed at bolstering the company’s AI capabilities.
Beijing is examining the acquisition of the Singapore-based firm, valued between $2 billion and $3 billion, to determine if it violates the country's stringent technology export control rules, according to a report by the Financial Times that has since been corroborated by other outlets. The preliminary review marks a potential new front in the ongoing US-China tech rivalry, with Chinese regulators scrutinizing deals taking place far beyond their borders.
Shares of Meta, which has a market capitalization of approximately $1.66 trillion, were largely unperturbed by the news, closing up 0.28% at $660.62 in recent trading. However, the regulatory overhang raises questions about the future of a key strategic investment for the Menlo Park-based company.
At the heart of the review is Manus's complex corporate history. Although currently headquartered in Singapore under the legal entity Butterfly Effect Pte, the AI firm was founded in China and some of its core technology originated from a Beijing-registered sister company. The Chinese commerce ministry is assessing whether the transfer of technology and personnel from China to Singapore, which occurred prior to the sale to Meta, should have required a government export license.
Meta’s acquisition of Manus, a specialist in advanced AI agents, was seen as a major step in its arms race against rivals like Google and OpenAI. The company intended to integrate Manus's technology—which functions as a sophisticated, general-purpose AI assistant capable of automating complex tasks—across its suite of products, including Facebook, Instagram, and WhatsApp.
The deal stipulated that Manus would sever its remaining ties to China, a condition that appears to have drawn Beijing's attention. While sources indicate the Chinese review is in its early stages and may not escalate to a formal investigation, the possibility that an export license is required could give Beijing leverage to influence the terms of the deal or, in a more extreme scenario, create obstacles to its completion.
This move by China signals a more assertive regulatory posture in the global technology landscape. It suggests that Beijing is willing to claim jurisdiction over transactions involving companies with Chinese origins, even after they have relocated. The scrutiny could create a chilling effect on future M&A activity in the AI sector, forcing acquirers to conduct deeper due diligence on startups with any historical ties to China.
Neither Meta nor Manus has issued a public comment on the Chinese review. The acquisition is one of several nine-figure deals Meta has pursued to accelerate its AI development, reflecting the intense competition for talent and proven technology in the rapidly evolving field.
The forward-looking uncertainty for the Manus deal underscores the navigating challenges that global technology firms face as they navigate an increasingly fragmented and politicized world. For Meta, a company that does not operate its primary social media services in China, the review is a stark reminder of how Beijing’s regulatory reach can impact strategic plans in unexpected ways.