China scrutinises Meta’s $2 billion deal with Manus

Meta’s proposed $2 billion acquisition of AI assistant platform Manus is facing regulatory scrutiny, with attention now focused on China rather than the United States, according to the Financial Times.

U.S. regulators appear to have accepted the deal after earlier questions over Benchmark’s investment in Manus. Those concerns arose when Benchmark led a funding round in the company earlier this year, prompting criticism from U.S. Senator John Cornyn and inquiries from the U.S. Treasury Department under new rules limiting American investment in Chinese artificial intelligence firms.

The scrutiny contributed to Manus relocating its operations from Beijing to Singapore, a move described by a Chinese academic on social media as a gradual disengagement from China.

Chinese regulators are now examining whether the Meta acquisition violates the country’s technology export control rules. Officials are reportedly reviewing whether Manus required an export license when it moved its core team and technology to Singapore. Such relocations have become common enough to be informally referred to as 'Singapore washing.'

The review could give Beijing more influence over the deal than previously expected. While some analysts have suggested China has limited ability to intervene because Manus is now based in Singapore, others say that view may underestimate China’s regulatory reach.

Chinese officials are concerned that approving the deal could encourage more domestic startups to relocate overseas to avoid regulatory oversight. Winston Ma, a professor at New York University School of Law and a partner at Dragon Capital, told the Wall Street Journal that a smooth closing of the deal could open a new path for young AI startups in China.

China has previously used export control laws to intervene in high-profile technology transactions, including during former President Donald Trump’s attempt to ban TikTok. A Chinese academic warned online that Manus’s founders could face legal consequences if restricted technology was transferred abroad without approval.

In the United States, some analysts view the acquisition as evidence that investment restrictions are pushing Chinese AI talent toward American companies. One expert told the Financial Times that the deal shows the U.S. AI ecosystem remains more attractive.

It remains unclear whether the regulatory reviews will affect Meta’s plans to integrate Manus’s AI software into its products.