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Meta’s $2 Billion Acquisition of Manus Sparks Regulatory Concerns in China
Meta’s recent acquisition of AI assistant platform Manus for $2 billion has sparked a regulatory tug-of-war, but not in the way one might expect. While US regulators appear to be on board with the deal, Chinese regulators are reportedly taking a closer look, citing concerns over technology export controls. According to the Financial Times, Chinese officials are reviewing whether the deal violates export controls, potentially giving Beijing leverage it wasn’t initially perceived as having.
The controversy surrounding the deal began earlier this year when Benchmark led a financing round for Manus, sparking immediate concerns about the investment. US Senator John Cornyn complained about the deal on X, and the investment prompted inquiries from the US Treasury Department around new rules restricting American investment in Chinese AI companies. These concerns were significant enough to spur Manus’s eventual relocation from Beijing to Singapore, part of what drove the company’s “step-by-step disentanglement from China,” as one Chinese professor described it on WeChat.
Regulatory Scrutiny in China
Chinese officials are now examining whether Manus needed an export license when it relocated its core team from China to Singapore, a move that’s apparently become so common it has earned the nickname “Singapore washing.” A recent Wall Street Journal article speculated that China has “few tools to influence the deal given Manus’s foothold in Singapore,” but that assessment may have been premature. The concern in Beijing is that this deal could encourage more Chinese startups to physically relocate to dodge domestic oversight.
Winston Ma, a professor at New York University School of Law and partner at Dragon Capital, told the Journal that if the deal closes smoothly, “It creates a new path for the young AI startups in China.” History suggests Beijing could act, as China previously used similar export control mechanisms to intervene in Trump’s attempted TikTok ban during his first term. A Chinese professor even warned on WeChat that Manus’ founders could face criminal liability if they exported restricted technology without authorization.
Implications for the US and China
Meanwhile, some US analysts are calling the acquisition a win for Washington’s investment restrictions, arguing it shows Chinese AI talent is defecting to the American ecosystem. One expert told the FT that the deal demonstrates “the US AI ecosystem is currently more attractive.” However, it’s too early to know if this impacts Meta’s plans to integrate Manus’s AI agent software into its products, but this $2 billion deal may have gotten more complicated than anyone anticipated.
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