China Investigates Meta’s Acquisition of AI Startup Manus Amid Tech Rivalry
China announced Thursday it will scrutinize Meta’s recent acquisition of Singapore-based artificial intelligence startup Manus, a move signaling escalating tensions in the global technology landscape and highlighting Beijing’s concerns over data security and technology transfer. The investigation underscores the growing rivalry between the U.S. and China in the critical field of artificial intelligence.
The deal, announced last week, sees the company behind Facebook and Instagram acquiring Manus, an AI firm with origins in China despite its current Singaporean base. This acquisition is considered unusual, representing a rare instance of a U.S. tech giant purchasing an AI company with significant ties to China, particularly during a period of strained relations between Washington and Beijing.
According to a statement from China’s Commerce Ministry, officials will assess whether the acquisition adheres to Chinese laws and regulations. A ministry spokesperson, He Yadong, emphasized that all outward investments, technology exports, data transfers, and cross-border mergers and acquisitions must comply with Chinese legal frameworks. Neither Meta nor Manus immediately responded to requests for comment.
“Security has become the top concern for Chinese policymakers,” noted a senior economist for Asia Pacific at investment bank Natixis. “Any tech transfer that could give the U.S. an edge in competitiveness will be heavily scrutinized.”
While Manus is officially headquartered with Butterfly Effect Pte in Singapore, its foundations lie in Beijing-registered entities established several years ago. Meta has stated that following the acquisition, there will be “no continuing Chinese ownership interests in Manus AI” and that Manus will cease operations within China. Despite this, Meta’s core platforms – Facebook and Instagram – remain blocked in China under the country’s strict internet censorship policies, often referred to as the “Great Firewall.”
Manus intends to maintain its operations in Singapore, where the majority of its workforce is currently located. The acquisition has already sparked debate within China’s academic circles. A professor at the University of International Business and Economics in Beijing publicly questioned the deal’s compliance with Chinese laws and technology export controls on the Chinese social media platform WeChat.
The professor’s concerns center on whether any technologies prohibited or restricted from export under Chinese regulations were transferred without the necessary licenses. Manus’s flagship product, a “general-purpose” AI agent released last year, is capable of autonomously performing complex, multi-step tasks by breaking them down into smaller, manageable components. The AI agent is available for free, with optional paid subscription packages.
Manus reported annual recurring revenue exceeding $100 million last month, demonstrating its growing success in the AI market. The outcome of China’s investigation remains uncertain, but it signals a clear intent to protect its technological interests and maintain control over the flow of sensitive data and technology.
Associated Press researcher Shihuan Chen in Beijing contributed to this report.
