Chinese authorities have intensified scrutiny of Meta Platforms Inc.’s $2 billion acquisition of Manus, an artificial intelligence startup, amid concerns over national security and technology transfer risks. The deal, announced in December 2024, has prompted a coordinated review by multiple government agencies in China, including the National Development and Reform Commission (NDRC), the Ministry of Commerce, and the country’s antitrust regulator.
The heightened attention followed an assessment by China’s National Security Commission, a body chaired by President Xi Jinping, which labeled the acquisition as a “conspiratorial” attempt to undermine China’s technological base. The commission’s report was circulated among senior Communist Party leaders and triggered a wider interagency investigation that leveraged various regulatory frameworks, including export controls, foreign investment rules, and competition laws.
Manus, which originally operated from Beijing before relocating its headquarters and core team to Singapore in mid-2024, became the center of a political and regulatory tug-of-war. Co-founders Xiao Hong and Ji Yichao were summoned by the NDRC in March and have been reportedly restricted from leaving China as authorities continue to probe potential breaches of foreign investment regulations. Discussions within Manus’s management have considered the possibility of divesting from Meta to ease regulatory concerns, though no decisions have been finalized.
The deal’s examination marks a notable shift in tone from earlier in 2024, when Chinese regulators had reviewed Manus’s move to Singapore and initially found no need for stringent controls. At that time, officials judged the company was not handling core technology subject to export restrictions and believed its capabilities were replicable. However, the National Security Commission’s intervention has pressured regulators to reassess and potentially reverse their earlier conclusions, reflecting growing caution amid escalating technological rivalries with the United States.
Manus gained prominence in March 2025 after launching an AI product that rapidly amassed over one million users. The product showcased “agentic” AI capable of performing complex, multi-step tasks, drawing significant investor interest and valuations. Despite skepticism from some critics who argued Manus mainly repackaged existing AI models from companies such as Anthropic and Alibaba, the startup secured $75 million in funding and grew its subscription-based revenue significantly.
Meta’s acquisition of Manus proceeded swiftly, reportedly within two weeks of initial contact, and neither party sought prior clearance from Chinese regulators before announcing the transaction. Following the announcement, China’s Ministry of Commerce began an initial review but did not immediately find regulatory violations. The subsequent escalation of scrutiny and the involvement of the National Security Commission have complicated the status of the deal, with some investors discussing options to unwind the transaction.
Chinese officials appear divided on the appropriate response. While there is a strong desire to close perceived loopholes that allow domestic technology to migrate abroad via foreign acquisitions, some regulators express concern that overly aggressive actions could deter talent retention and innovation within China’s technology sector. A government spokesperson reiterated that China supports cross-border business and technological cooperation, provided such activities comply with legal requirements.
Meta has maintained that the acquisition conformed with all applicable laws and is optimistic about resolving the ongoing inquiry. Manus and Chinese regulatory bodies have not provided public comments on the matter. As the situation develops, the case is seen as a significant test of Beijing’s evolving stance on outbound technology flows and the management of growing strategic competition with the U.S. in advanced fields such as artificial intelligence.