Chinese officials are reviewing Meta’s $2 billion acquisition of AI startup Manus for possible technology control violations, FT reported on Tuesday.
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China said Thursday it will investigate Meta‘s $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 U.S. tech giant looks 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 deal closed at an amount over $2 billion, according to sources familiar with the acquisition.
China’s Ministry of Commerce said it will conduct an assessment and investigation into how the acquisition complies with laws and regulations concerning export controls, technology import and export, and overseas investment, according to a statement translated by Google.
“The Chinese government consistently 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 start-up Butterfly Effect, also known as Monica.Im, before growing into a separate entity, which relocated to Singapore earlier this year.
The startup was hailed as the next DeepSeek after it launched its first AI agent in March, which can help with tasks such as market research, coding and data analysis.
The company reportedly laid off most of its staff in Beijing in July as it eyed global expansion. Manus said the Meta acquisition would see the company continue to operate from Singapore. The startup said it had 105 employees across the South Asian nation, Tokyo, and San Francisco in December.
Manus said it had passed $100 million in annual recurring revenue (ARR) in December, eight months on from launching a product, which it claimed made it the fastest startup in the world to hit the milestone from $0.
“Manus’s exceptional talent will join Meta’s team to deliver general-purpose agents across our consumer and business products, including in Meta AI,” Meta said in a statement in December.
The acquisition follows the company raising $75 million in a round led by U.S. VC Benchmark in April.
China’s probe “underlines that [the country] considers advanced AI agents, models and related IP to be strategic assets,” Nick Patience, AI lead at The Futurum Group, told CNBC.
“The most likely outcome I see is a lengthier approval process and potential conditions around how Manus technology developed in China can be used, rather than an outright block, but the threat of stricter action gives Beijing bargaining power in a high profile, US led acquisition,” he added.
Meta’s AI expansion
Meta’s Manus acquisition comes as the company has spent billions of dollars building out 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, which brought founder and CEO Alexandr Wang onto the tech giant’s leadership team. Meta also announced it was acquiring AI wearable startup Limitless in December.
Meta chief Mark Zuckerberg has been deprioritizing the company’s Fundamental Artificial Intelligence Research (FAIR) unit in favor of its more product-oriented GenAI team to help Meta make headway in AI and improve its Llama family of AI models, CNBC previously reported.
