China said on Thursday it will investigate Meta’s roughly $2 billion acquisition of artificial intelligence startup Manus, a move that highlights Beijing’s increasing scrutiny of advanced AI technologies and their cross-border transfer amid intensifying global competition in the sector.
Meta acquired Singapore-based Manus last month as part of its push to deepen automation and AI agent capabilities across its consumer and enterprise products. While the companies did not disclose financial terms, the Wall Street Journal reported that the deal was valued at more than $2 billion, citing people familiar with the transaction.
China’s Ministry of Commerce said it will conduct an assessment and investigation into whether the acquisition complies with the country’s laws and regulations governing export controls, technology import and export, and overseas investment. The ministry’s statement, translated by Google, suggests the probe will examine both the origins of Manus’s technology and how intellectual property developed in China may be transferred or used following the acquisition.
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“The Chinese government consistently supports enterprises in conducting mutually beneficial transnational operations and international technological cooperation in accordance with laws and regulations,” Ministry of Commerce spokesperson He Yadong said at a press briefing, signaling that while Beijing is not rejecting overseas deals outright, it intends to assert regulatory oversight over strategically sensitive technologies.
Manus traces its roots to the Chinese startup Butterfly Effect, also known as Monica.im, before being spun out into a separate entity that relocated its headquarters to Singapore earlier this year. The move came as the company sought to position itself more clearly as a global AI player at a time of rising regulatory and geopolitical friction between China and the United States over advanced technologies.
The startup drew significant attention in March after launching its first AI agent, which can assist with tasks such as market research, coding, and data analysis. It was widely described in Chinese tech circles as a potential “next DeepSeek,” a reference to another fast-growing AI firm that gained prominence for its rapid technical progress.
As part of its global expansion plans, Manus reportedly laid off most of its staff in Beijing in July. The company said the Meta acquisition would not change its operational base, with Manus continuing to operate from Singapore. As of December, the startup said it had 105 employees across Singapore, Tokyo, and San Francisco.
Manus has also pointed to strong commercial traction. The company said it surpassed $100 million in annual recurring revenue in December, just eight months after launching its product, which it described as the fastest any startup had reached that milestone from zero revenue. In April, it raised $75 million in a funding round led by U.S. venture capital firm Benchmark, further raising its profile among Western investors.
In a statement released in December, Meta said the acquisition would see “Manus’s exceptional talent” join its AI teams to help deliver general-purpose AI agents across Meta’s consumer and business offerings, including within Meta AI. The deal fits squarely into Meta’s broader strategy of accelerating product-focused AI development as competition intensifies with rivals such as OpenAI and Google.
Analysts say China’s move reflects a broader shift in how Beijing views advanced AI capabilities.
“China’s probe underlines that it considers advanced AI agents, models and related IP to be strategic assets,” Nick Patience, AI lead at The Futurum Group, told CNBC.
He added that a prolonged approval process, potentially with conditions on how technology developed in China can be used, is more likely than an outright block, but that the investigation itself gives Beijing leverage in a high-profile, U.S.-led acquisition.
The scrutiny comes as governments around the world tighten controls on the flow of advanced technologies. China has, in recent years, expanded export control rules covering areas such as semiconductors, AI algorithms, and data-related technologies, often in response to U.S. restrictions on chip exports and investment flows. Deals involving AI firms with Chinese roots have increasingly become focal points for these regulatory battles.
For Meta, the investigation creates a new challenge to an already aggressive AI expansion. The company has spent billions of dollars to strengthen its position as generative AI becomes central to consumer products, advertising tools, and enterprise software. In June, Meta invested $14.3 billion for a 49% stake in data-labeling and AI infrastructure startup Scale AI, bringing its founder and CEO, Alexandr Wang, into Meta’s leadership ranks. In December, Meta also announced the acquisition of AI wearable startup Limitless.
Internally, Meta chief executive Mark Zuckerberg has been reshaping the company’s AI strategy. The firm has deprioritized its long-standing Fundamental Artificial Intelligence Research (FAIR) unit in favor of a more product-driven generative AI team, as Meta seeks to rapidly improve and commercialize its Llama family of AI models, CNBC has previously reported.
China’s probe into the Manus deal is the latest example of how corporate AI strategy is increasingly entangled with national policy and geopolitics. Even as global tech companies race to secure talent and technology, cross-border acquisitions in AI are likely to face longer timelines, stricter conditions, and heightened political sensitivity, especially when they involve firms with roots in both China and the United States.