Topline
The Chinese Government on Monday blocked Meta’s $2 billion deal to acquire the Chinese-founded artificial intelligence startup Manus, a regulatory maneuver that comes amid an escalating fight between Washington and Beijing over advanced AI technologies.
Chinese authorities blocked Meta’s $2 billion deal to acquire Manus.
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Key Facts
According to China’s official Xinhua News Agency, the country’s National Development and Reform Commission (NDRC) foreign investment review arm has issued a decision to block the sale of Manus.
The agency said it has also issued an order to all parties involved to unwind the acquisition.
Manus launched as an AI agent, which is designed to autonomously carry out complex tasks, such as writing research reports, preparing presentation slides and building websites, last year in March.
The launch was hailed by Chinese state media as the country’s latest breakout AI product, following the launch of Deepseek’s AI model, which shook up major U.S. tech stocks.
Meta, which announced the acquisition in late December, has not commented on the Chinese government’s order yet.
What Do We Know About Manus’ Parent Company?
According to the Wall Street Journal, early versions of Manus were developed by the Chinese startup Beijing Butterfly Effect Technology, founded in 2022. After its launch last year, the AI startup relocated its top engineers and headquarters from Beijing to Singapore, joining several other Chinese firms in doing so. Moving to Singapore allows many Chinese AI startups to circumvent U.S.-China geopolitical tensions and gain access to Western AI models and investors. According to the Financial Times, Manus’ move to Singapore had initially been cleared by the NDRC, however, Meta and the startup did not inform Chinese authorities before inking the deal in December.
How Did Beijing React To The Meta-Manus Deal?
In January, just days after Meta and Manus announced the deal, Chinese officials began investigating the acquisition for potential national security issues and export control violations. Last month, the NDRC reportedly ordered the startup’s co-founders, Xiao Hong and Ji Yichao, to meet its officials and discuss the acquisition. Both were then purportedly asked not to leave China until the review was completed.