Chinese authorities are examining Meta’s $2 billion acquisition of AI startup Manus for possible technology control violations, the FT reported on Tuesday.
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China announced Thursday it would investigate MetaThe $2 billion acquisition of artificial intelligence startup Manus to assess its compliance with export control laws.
Meta acquired Singapore-based Manus last month, as the US tech giant seeks to integrate advanced automation into its consumer and enterprise products.
Terms of the acquisition were not disclosed, but the Wall Street Journal reported that the transaction was concluded for an amount exceeding $2 billion, according to sources familiar with the matter.
China’s Ministry of Commerce said it will conduct an assessment and investigation into how the acquisition complies with laws and regulations regarding export controls, import and export of technology, and overseas investment, according to a statement translated by Google.
“The Chinese government constantly supports enterprises in conducting mutually beneficial transnational operations and international technological cooperation in accordance with laws and regulations,” Ministry of Commerce spokesperson He Yadong said at a press briefing.
CNBC has contacted Meta and Manus for comment.
Manus began as a product of Chinese startup Butterfly Effect, also known as Monica.Im, before becoming a separate entity, which moved to Singapore earlier this year.
The startup was hailed as the next DeepSeek after launching its first AI agent in March, which can help with tasks such as market research, coding and data analysis.
The company would have laid off most of its staff in Beijing in July as it eyes global expansion. Manus said the acquisition of Meta would enable the company to continue operating from Singapore. The startup said it had 105 employees in the South Asian country, Tokyo and San Francisco as of December.
Manus said it surpassed $100 million in annual recurring revenue (ARR) in December, eight months after launching a product, which it said made it the world’s fastest startup to hit the $0 milestone.
“Manus’ exceptional talent will join the Meta team to provide versatile agents for our consumer and enterprise products, including in Meta AI,” Meta said in a statement in December.
This acquisition follows the raising of $75 million led by the American company VC Benchmark in April.
China’s investigation “underscores that (the country) views advanced AI agents, models and intellectual property as strategic assets,” Nick Patience, head of AI at The Futurum Group, told CNBC.
“The most likely outcome I see is a longer approval process and potential conditions around how Chinese-developed Manus technology can be used, rather than an outright blockade, but the threat of tougher action gives Beijing negotiating leverage in a high-profile U.S.-led acquisition,” he added.
Meta’s AI expansion
Meta’s acquisition of Manus comes as the company has spent billions of dollars developing its AI capabilities in the face of advances from rivals OpenAI and Google.
In June, the company invested $14.3 billion in a 49% stake in AI startup Scale AI, leading founder and CEO Alexandr Wang to join the tech giant’s management team. Meta too announcement it acquired wearable AI startup Limitless in December.
Meta chief Mark Zuckerberg deprioritized the company’s Fundamental Artificial Intelligence Research (FAIR) unit in favor of its more product-oriented GenAI team to help Meta advance AI and improve its Llama family of AI models, CNBC previously reported.