China reviews Meta's $2 billion acquisition of AI startup Manus - FT
Kyiv • UNN
Chinese officials are reviewing Meta's $2 billion acquisition of AI platform Manus over potential export control violations. This could give Beijing leverage over the deal, which is a rare instance of an American company acquiring a Chinese AI startup.
Chinese officials are reviewing Meta's $2 billion acquisition of AI platform Manus for potential violations of technology export controls, potentially giving Beijing leverage over the high-profile deal, the Financial Times reports, writes UNN.
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The deal, announced last week, is a rare instance of a US business acquiring an advanced AI startup with Chinese roots at a time when Washington and Beijing are in increasingly fierce competition over a range of advanced technologies, the publication writes.
Two people familiar with the matter said that officials from China's Ministry of Commerce have begun to assess whether the relocation of Manus personnel and technology to Singapore and its subsequent sale to Meta requires an export license under Chinese law.
While the review is in its early stages and may not lead to a formal investigation, the need for a license could give Beijing an opportunity to influence the deal, including trying to force the parties to abandon the deal as a last resort, sources said.
China used a similar mechanism to interfere with Washington's attempt to force the sale of TikTok during US President Donald Trump's first term.
The Manus deal caught Beijing's attention due to concerns that it could incentivize Chinese startups to physically relocate from the country to circumvent domestic oversight, one source said.
However, the second person noted that Manus's product, an AI-powered assistant, was not considered a key technology vital to China, reducing the need for intervention.
Opening a second headquarters or offices in Singapore has become so common among Chinese companies seeking customers worldwide that the practice has become known as "Singapore washing" to describe efforts to shed geopolitical sensitivities associated with operating from China.
Chinese groups in Singapore typically maintained operations in their home country, but Manus's core team moved to the city-state in the summer of 2025, leaving Beijing with few clear options for intervention if officials decide action is necessary. Meta products, including Facebook, Instagram, and WhatsApp, are blocked in China.
Manus is operated by the Singaporean company Butterfly Effect Pte. The product was developed, at least in part, by the subsidiary Beijing Butterfly Effect Technology, which Manus founders, including CEO Xiao Hong, established in 2022.
The organization remains registered in Beijing, although its offices were empty when the Financial Times visited in August. Meta plans to operate Manus AI agent software and integrate the technology into its own products.
Manus's move to Singapore followed a funding round led by US venture capital firm Benchmark, which prompted inquiries from the US Treasury Department regarding new rules restricting US investment in Chinese artificial intelligence.
"Manus's step-by-step separation from China was undoubtedly driven by US investment restrictions," Cui Fang, a professor at the University of International Business and Economics, said in a public WeChat post on Saturday.
Cui suggested that any review of Meta's acquisition by China would have to focus on whether the Manus team developed export-controlled technologies while in China.
"If unauthorized export of restricted technologies is confirmed, legal liability may arise... [including] criminal liability," he wrote. "To believe that a quick break with China can circumvent regulatory regimes in both the US and China may be an oversimplification."
In the US, some analysts praised Meta's acquisition as a victory for Washington's restrictions on foreign investment.
"The acquisition of Manus shows that US restrictions on investment and AI chip exports are causing the development of two different AI ecosystems – a US AI ecosystem and a Chinese AI ecosystem," said Chris McGuire, a senior fellow at the Council on Foreign Relations. "Manus's exit shows that the US ecosystem is currently more attractive."
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