Meta Platforms, Inc. is under the spotlight as China’s Ministry of Commerce investigates its $2 billion acquisition of Manus, a Singapore-based AI startup. The deal is raising multiple concerns over national security and compliance with technology export regulations.
Manus: A Rapidly Growing AI Startup
Manus, initially founded in China under the name Monica.Im as part of Butterfly Effect, relocated to Singapore in 2024. Known for its cutting-edge AI agent technology, Manus developed a revolutionary solution handling market research, coding, and data analysis tasks.
Within just eight months of launching its first product in March 2024, Manus reached $100 million in annual recurring revenue. Its significant growth captured the attention of investors, including US venture capital firm Benchmark, which invested $75 million in April 2024. However, the funding also triggered criticism from lawmakers concerned about the potential risks of tech transfer involving China-linked companies.
Regulatory Concerns and National Security
The acquisition officially closed in December 2024. However, China’s Ministry of Commerce is carefully reviewing the transaction to ensure compliance with national security laws and technology export controls. Regulators are examining whether the acquisition violates any technology import-export or overseas investment laws.
The Chinese government views advanced AI technologies as strategic assets and is thoroughly assessing this rare instance of a US-based company acquiring an Asian tech firm. Outcomes of the investigation could include extended approval timelines, potential penalties, or mandated conditions restricting the use of acquired technologies.
Meta’s Push into AI Automation
Meta’s acquisition of Manus aligns with its broader strategy to integrate AI solutions into consumer and business automation products. According to sources close to the investigation, Meta plans to embed Manus AI into its existing AI product lineup, further solidifying its position in the market. The investigation’s outcome, however, could impact the timeline and scale of deployment.
Neither Meta nor Manus has offered any public comments on the situation, and the timeline for the ministry’s review remains uncertain.
Looking Forward
As global regulators focus on ensuring compliance with cross-border technology transactions, high-profile deals like this serve as reminders of the complexities involved in the global AI industry. Companies venturing into AI acquisitions must navigate stringent export control laws, geopolitical implications, and technology transfer risks.
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