Meta’s $2 billion acquisition of AI assistant platform Manus is facing regulatory review from Chinese authorities, even as US regulators appear comfortable with the transaction, according to reporting by the Financial Times.
US officials are said to be satisfied that the deal complies with existing rules, despite earlier questions around US venture capital involvement in Manus. Attention has now shifted to Beijing, where regulators are assessing whether the transaction breaches China’s technology export controls.
Earlier US Concerns And Manus Relocation
When Benchmark led a financing round for Manus earlier this year, the investment drew criticism in Washington. John Cornyn raised concerns publicly, and the deal triggered inquiries from the US Treasury Department under new rules limiting American investment in Chinese artificial intelligence companies.
Those concerns contributed to Manus relocating its headquarters and core operations from Beijing to Singapore. A Chinese academic described the move on WeChat as part of the company’s gradual disentanglement from China.
Chinese Review Of Export Controls
Chinese regulators are now examining whether Manus required an export license when it transferred its core team from China to Singapore. The relocation trend has become common enough to earn the nickname “Singapore washing,” according to the Financial Times.
A recent report by the Wall Street Journal suggested China had limited ability to influence the acquisition because of Manus’ presence in Singapore. That view is now being questioned as Beijing assesses whether export control rules apply to the move.
Chinese officials are concerned that approving the deal could encourage more domestic startups to relocate abroad to avoid regulatory oversight.
Broader Implications For Chinese Startups
Winston Ma, a professor at the New York University School of Law and a partner at Dragon Capital, told the Wall Street Journal that if the acquisition proceeds without intervention, it could establish a new pathway for early stage AI companies in China.
China has previously used export control mechanisms in similar situations. During Donald Trump’s first term, Beijing applied such measures when responding to US efforts to restrict TikTok. A Chinese professor posting on WeChat warned that Manus’ founders could face criminal liability if restricted technology was transferred without approval.
Diverging Interpretations In The US
Some US analysts view the deal as evidence that Washington’s investment restrictions are having their intended effect. One expert cited by the Financial Times said the acquisition shows that the US AI environment is currently more appealing to Chinese talent.
It remains unclear whether the regulatory review will affect Meta’s plans to integrate Manus’ AI agent software into its products. The transaction, valued at $2 billion, is now subject to regulatory scrutiny beyond the United States.
Featured image credits: Automated Marketer
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