The global race for artificial intelligence dominance just got a lot more complicated. A massive $2 billion acquisition by Meta Platforms, the parent company of Facebook and Instagram, is now under intense regulatory scrutiny by Chinese authorities, adding a thick layer of geopolitical tension to the burgeoning world of advanced technology.
The deal in question involves Manus, a Singapore-based startup that made waves late last year for its cutting-edge work in autonomous, or “agentic,” AI. Unlike a traditional chatbot that requires continuous prompting, Manus created a software agent capable of executing complex, multi-step tasks entirely on its own, like running a stock analysis report or building a website. For Meta, the acquisition, reportedly valued between $2 billion and $3 billion, was a strategic move to turbocharge its own AI efforts and integrate sophisticated, task-completing intelligence into its massive social media ecosystem.
However, the smooth transition Meta hoped for has hit a significant snag in Beijing. China’s Ministry of Commerce, or MOFCOM, has launched a regulatory review that focuses not on the eventual sale to the US tech giant, but on Manus’s origins and its prior relocation. Manus was initially founded in China, but in a move widely seen as an attempt to avoid local supervision and attract Western venture capital, the company shifted its headquarters, core team, and technology to Singapore by mid-2025.
This relocation is at the heart of the controversy. Chinese officials are investigating whether this transfer of technology and staff—before the acquisition was formalized—violated China’s strict technology export control laws. If MOFCOM determines that an export license was required and not obtained, the consequences could be severe, potentially stalling the deal or, in a more extreme scenario, leading to its complete collapse. Reports even suggest the company’s founders could face criminal liability.
More than just a simple compliance issue, the review highlights deep-seated anxieties within the Chinese government. The Manus case is viewed by some officials as a worrying precedent that could encourage other high-potential domestic startups to relocate overseas to bypass regulation, a phenomenon sometimes dubbed “Singapore washing.” There’s a palpable fear of an AI “brain drain,” where China’s brightest technological minds and most valuable intellectual property are snapped up by foreign rivals.
For Meta, which has been pushing hard to become a leader in the agentic AI space, the move was critical. The company intended to keep Manus operating as a separate entity while integrating its expertise to improve products like Meta AI. Now, the fate of the deal is tangled up in the complex web of US and China technology trade tensions. The regulatory review signals a new and aggressive front in the ongoing tech competition, one where even a completed acquisition can be retroactively challenged, sending a clear warning to other Chinese-founded startups seeking an exit to the global market.