Meta's $2 Billion Manus Acquisition Under Chinese Scrutiny For Possible Export Control Violations: Report

The Chinese government is reportedly reviewing Meta Platforms Inc.‘s (NASDAQ:META) recent acquisition of AI firm Manus for potential violations of technology export controls.

China Reviews Manus AI Move To Singapore

The Chinese Ministry of Commerce is assessing whether Manus’ staff and technology relocation to Singapore, followed by the sale to Meta, require an export license under Chinese law, reported the Financial Times on Wednesday. 

The review, which is still in its early stages, could potentially give Beijing the power to influence the transaction, potentially even forcing the parties to abandon it, according to the report.

Manus, operated by Singapore-based Butterfly Effect Pte, was partly developed by its sister company in Beijing, founded in 2022 by CEO Xiao Hong and others. Although still registered in Beijing, its offices were empty as of August, as per the publication. Following a funding round led by U.S. VC Benchmark, which triggered U.S. Treasury scrutiny over new rules on American investment in Chinese AI, Manus relocated to Singapore.

Meta did not immediately respond to Benzinga‘s request for comment.

Meta Eyes AI Growth Amid US-China Tech War

Meta’s acquisition of Manus was seen as a strategic move to expand its AI capabilities. The deal, announced in late December, saw Meta acquire the firm for over $2 billion, with plans to integrate its technology into Meta’s own products. The acquisition was part of Meta’s broader push into the AI space and gaining an edge over OpenAI, following its acquisition of Scale AI earlier in the year.

The Chinese government’s review of the Manus deal comes amid an increasingly tense competition between the U.S. and China over advanced technologies. The outcome of this review could have significant implications for Meta’s future in the Chinese market and for other companies engaging in similar transactions.

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Price Action: Over the past year, Meta stock climbed 6.92%, as per data from Benzinga Pro. On Tuesday, it edged 0.28% higher to close at $660.62.

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