Beijing has intensified its scrutiny of Meta Platforms (NASDAQ:META) $2 billion acquisition of Chinese-founded agentic AI startup Manus, expanding the probe beyond initial concerns over technology export and national security rules to include potential violations of cross-border currency controls, tax accounting standards, and overseas investment regulations, according to people familiar with the matter.
The investigation, which began shortly after the deal closed in December 2025, centers on whether sensitive Chinese technology or user data may have been transferred to a U.S. company, as well as compliance with rules governing outbound capital flows and corporate restructuring.
Manus, founded by Chinese entrepreneurs and originally based in Beijing and Wuhan, relocated its headquarters and staff to Singapore in July 2025, a move that has drawn attention as an example of “Singapore-washing”—a practice where Chinese-origin tech firms shift domicile to the city-state to facilitate global expansion while maintaining ethnic Chinese talent and language advantages.
The broadening review highlights Beijing’s growing wariness of high-profile U.S. acquisitions of Asian AI companies, particularly those involving advanced agentic AI technology capable of autonomously executing complex tasks.
Manus gained prominence in March 2025 for its AI agents that outperformed OpenAI’s Deep Research in certain benchmarks, attracting early U.S. investment from Benchmark and comparisons to OpenAI and DeepSeek.
The startup’s rapid rise and subsequent acquisition by Meta, orchestrated over roughly 10 days, raised questions in China about the transfer of potentially strategic AI capabilities to an American firm.
While the probe remains preliminary and Beijing could ultimately decide against intervention, the risk of regulatory action—including demands to alter deal terms or, in extreme cases, unwind the transaction—has increased.
Some officials privately expressed initial support for Manus post-announcement, and Manus’s backers have already realized their returns, making a full unwind practically challenging. Representatives for Meta and Manus declined to comment, and China’s Commerce Ministry did not respond to requests for comment.
The case has also spotlighted regulatory sensitivities around data transfers and tax implications tied to the Singapore relocation, which saw dozens of employees decline to move.
Manus’s primary agentic AI product has never been offered in China, though its earlier Chrome extension, Monica, remains available there.
Regulators had not previously opened a formal inquiry, presuming continued strong China ties.
Meta intends to integrate Manus’s technology into its broader AI services while maintaining the standalone Manus offering.
Meta’s Chief AI Officer Alexandr Wang welcomed the roughly 100-person Manus team via a post on X, and co-founder Red Xiao highlighted the deal’s potential to expand the reach of agentic AI.