Meta previously spent $20 billionAcquires AI Agent startup ManusThis move aims to accelerate the company's enterprise-level AI innovation, but this high-profile deal is likely to face significant uncertainties. (According to Bloomberg News)ReportChinese regulators have decided to intervene and launch a comprehensive and in-depth investigation into the acquisition, focusing on "technology export controls" and "data security," which could delay or even derail the deal.
Despite attempting to "move" to avoid suspicion, they still couldn't escape the watchful eyes of regulators.
Manus is a startup founded by Chinese entrepreneur Xiao Hong. Its core product is an AI agent service that can generate website prototypes and internal tools for enterprises, emphasizing "automating business without writing code." To avoid the sensitive issue of the US-China tech war, Manus's parent company, Beijing Butterfly Effect Technology, moved its headquarters to Singapore as early as mid-2025, attempting to downplay its Chinese capital presence.
However, this "nationality change" strategy does not seem to have been entirely effective. The report points out that although Meta emphasized that Manus would no longer have Chinese ownership after the acquisition and would cease operations in China, the Chinese Ministry of Commerce did not relent.
The review focuses on three key areas: technology, data, and funding.
The Chinese government has expanded its review from a compliance assessment to a national security level, focusing primarily on three areas:
• Export of technology and algorithms:This is the most crucial point. Chinese authorities will rigorously examine whether Manus's core algorithms and AI technology originated from a Chinese R&D team, and whether they fall under the category of sensitive technologies restricted from export under export control laws.
• Data security:Will the large amount of data processed by Manus during its past operations be subject to unauthorized cross-border flow due to its acquisition by Meta, leading to potential cybersecurity and personal data leakage risks?
• Legality of funds and investments:The investigation also covers Meta's acquisition fund flows, foreign exchange procedures, and whether the initial investment reporting procedures were compliant.
It could drag on for up to six months, with a great deal of uncertainty.
Experts analyze that this investigation shows the Chinese government is attempting to tighten export controls on "AI-sensitive technologies." The entire review process could take up to six months. Considering the rapid pace of development in the AI industry, a six-month standstill would be extremely damaging to a startup.
Furthermore, if China determines that Manus possesses a key technological advantage, it may even directly reject the transaction on grounds of "anti-monopoly" or "national security."
