China Grills Zuckerberg Over Meta’s $2B Manus AI Takeover—What’s Really Going On?
Meta's latest AI acquisition just hit a regulatory wall—and Beijing isn't playing nice.
When Mark Zuckerberg's empire dropped $2 billion on Manus AI last quarter, analysts called it a 'bet on China's AI brain drain.' Now regulators are flipping the script with brutal scrutiny.
The real question? Whether this is about national security—or a power move in the US-China tech cold war.
Meanwhile, Wall Street's still pricing in 'synergies' like it's 2021. Some things never change.
TLDR
- China’s Ministry of Commerce is reviewing Meta’s $2 billion acquisition of AI startup Manus for potential export control violations
- Manus is a Singapore-based AI agent company that originated in China under parent company Butterfly Effect before relocating
- The deal closed in December 2024 and marks a rare US acquisition of an Asian tech company
- Manus achieved $100 million in annual recurring revenue just eight months after launching its product
- Chinese regulators are assessing whether the transaction complies with laws around technology exports and national security
China has launched a review of Meta’s acquisition of AI startup Manus. The Ministry of Commerce confirmed it will investigate whether the deal violated export control regulations.
Meta Platforms, Inc., META
The transaction closed in December at a value exceeding $2 billion. Meta acquired the Singapore-based company to boost its AI capabilities across consumer and business products.
Chinese officials are examining potential national security implications. The review will assess compliance with laws governing technology exports, imports, and overseas investments.
Manus started as part of Chinese company Butterfly Effect, also known as Monica.Im. The startup relocated to Singapore earlier in 2024 before Meta bought it.
The company gained attention after launching its first AI agent in March 2024. The product handles tasks like market research, coding, data analysis, and screening resumes.
Rapid Growth Caught Attention
Manus reached $100 million in annual recurring revenue by December. This milestone came just eight months after product launch, making it potentially the fastest startup globally to hit that mark from zero.
The company raised $75 million from US venture capital firm Benchmark in April 2024. That funding round drew criticism from American lawmakers concerned about AI companies with China ties.
Manus reportedly laid off most Beijing staff in July. The cuts came as the company focused on global expansion.
Meta plans to integrate Manus technology into Meta AI. The startup had 105 employees across Singapore, Tokyo, and San Francisco in December.
Early Stage Investigation
The Chinese government review is in its initial phases. Regulators may ultimately decide not to intervene, according to sources familiar with the matter.
Similar reviews can evolve into formal probes. If violations are found, outcomes could include penalties or conditions required for deal approval.
Ministry of Commerce spokesperson He Yadong addressed the review at a press briefing. He stated China supports companies conducting cross-border operations that follow laws and regulations.
Beijing has scrutinized other tech deals recently. Regulators are also reviewing ByteDance’s sale of TikTok US to American investors.
China has pushed domestic firms to develop technology replacing American software and hardware. This effort has focused mainly on AI accelerators and semiconductors.
Analysts view the probe as China treating advanced AI as strategic assets. The review could result in a longer approval process and potential conditions on technology use.
The deal represents Meta CEO Mark Zuckerberg’s latest major AI investment. Manus’ AI agent technology completes general tasks based on basic user instructions.
Neither Meta nor Manus representatives provided comment on the investigation. The review timeline and potential outcomes remain unclear as regulators assess the transaction’s compliance with Chinese law.
