China is scrutinizing Meta’s recent $2 billion acquisition of AI startup Manus, with regulators in Beijing initiating a review to assess potential violations of technology control regulations. The investigation, confirmed by China’s Ministry of Commerce, will examine the deal’s compliance with laws pertaining to export controls, technology import and export, and overseas investments.
This move signals China’s heightened focus on safeguarding what it considers strategic technological assets, particularly in the rapidly advancing field of artificial intelligence. Meta, the parent company of Facebook and Instagram, acquired Singapore-based Manus last month, aiming to bolster its capabilities in automation and AI agents for both consumer and enterprise applications. While the financial terms were not fully disclosed, reports suggest the transaction exceeded $2 billion.
Manus, which originated from the Chinese startup Butterfly Effect (also known as Monica.Im), transitioned into a distinct entity and relocated to Singapore earlier this year. The startup gained significant attention for its AI agent, launched in March, designed to assist with a range of tasks including market research, coding, and data analysis. Manus reportedly achieved remarkable commercial success, surpassing $100 million in annual recurring revenue within eight months of its product’s launch, a feat it claimed made it the fastest startup globally to reach this milestone from inception.
The acquisition by Meta was intended to integrate Manus’s “exceptional talent” to enhance Meta’s AI offerings, including Meta AI, with general-purpose agents. The deal followed a $75 million funding round led by U.S. venture capital firm Benchmark in April.
Experts suggest that China’s investigation, while potentially leading to a prolonged approval process and specific conditions on the use of Manus’s technology developed within China, is unlikely to result in an outright block. However, the probe grants Beijing significant leverage in negotiations for this high-profile, U.S.-led acquisition. This situation underscores the complex geopolitical landscape surrounding AI development and the strategic importance nations place on controlling cutting-edge technological advancements.
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