China has launched a comprehensive review of Meta’s $2 billion acquisition of AI startup Manus, which the social media giant completed in December. The investigation initially focused on national security and tech exports but has expanded to include money transfers, tax reporting, and overseas business operations.
Manus, founded in Beijing under Butterfly Effect, moved staff and operations to Singapore earlier this year, a shift officials say raised red flags about data handling and tax compliance. The startup developed AI tools that assist with tasks such as resume sorting, travel planning, and financial research. Meta acquired the company to integrate these tools into its AI productivity offerings.
Although the deal is closed and Meta now owns Manus, Chinese authorities are scrutinizing the transaction because the company originated in China and maintained prior connections, including older products still active in the country. The review reflects Beijing’s broader vigilance over foreign acquisitions of domestic AI companies, particularly those with sensitive technology or personnel relocating abroad.
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