China to probe Meta's acquisition of artificial intelligence startup Manus

HONG KONG (AP) — China said on Thursday it would assess and investigate Meta’s acquisition of artificial intelligence startup Manus, in a move highlighting its technology rivalry with the U.S..

Meta announced last week it was buying Manus, which is Singapore-based with Chinese roots, as the California tech giant behind Facebook and Instagram expands its AI offerings across its platforms.

It is a rare acquisition by a U.S. tech group of an AI company with Chinese roots, at a time of heightened frictions between Washington and Beijing.

On Thursday, China’s Commerce Ministry spokesperson He Yadong told reporters that it would work with relevant departments to assess and investigate whether Meta’s acquisition of Manus is consistent with Chinese laws and regulations.

Any enterprises engaging in outward investment, technology export, data transfer and cross-border mergers and acquisitions must comply with Chinese laws, He said.

Meta and Manus did not immediately reply to requests for comment.

“Security has become the top concern for Chinese policymakers,” said Gary Ng, a senior economist for Asia Pacific at investment bank Natixis. “Any tech transfer that could give the U.S. an edge in competitiveness will be heavily scrutinized.”

While the company behind Manus is Singapore-based Butterfly Effect Pte, its roots can be traced back to Beijing-registered entities which were founded in China a few years ago.

Meta said last week there would be “no continuing Chinese ownership interests in Manus AI” following the acquisition, and that Manus would discontinue its services and operations in China. Meta’s platforms including Facebook and Instagram are still banned in China under the country’s “Great Firewall”.

Manus said it would continue to operate in Singapore, where most of its employees are now based.

Cui Fan, a professor at the University of International Business and Economics in Beijing, raised questions in a public post on the Chinese social media site WeChat over the acquisition’s compliance with Chinese laws and technology export controls.

“A key question is whether any technologies prohibited or restricted from export under Chinese laws and regulations are exported without a license,” he wrote.

The “general-purpose” AI agent released by Manus last year can autonomously perform multi-step complex work such as breaking down tasks into smaller steps. It can be used for free but also offers paid subscription packages.

Last month, Manus said its annual recurring revenue had reached more than $100 million.

Associated Press researcher Shihuan Chen in Beijing contributed to this report.