China announced on Thursday that it will probe the acquisition of artificial intelligence startup Manus by Meta, which purchased it at a valuation of $2 billion, to determine its adherence to the export control regulations.
Meta acquired Singapore-based Manus in the previous month as the U.S. tech giant seeks to integrate advanced automation into its consumer and enterprise products.
The sources familiar with the acquisition reported that the terms of the acquisition remained undisclosed, as the Wall Street Journal stated that the agreement ended at over $2 billion.
In a statement translated by Google, the Chinese Ministry of Commerce indicated planning to assess and investigate the legality of the acquisition by laws and regulations governing export controls, technology importation and exportation, and overseas investment.
At a press briefing, Ministry of Commerce spokesperson He Yadong said, “The Chinese government consistently supports enterprises in conducting mutually beneficial transnational operations and international technological cooperation in accordance with laws and regulations.” CNBC has approached Meta and Manus to comment.
Manus is the product of a Chinese start-up Butterfly Effect, also referred to as Monica. Im, which then evolved into its own business, moved to Singapore earlier this year.
It was reported that the startup received the next DeepSeek when it released the initial AI agent in March of the previous year, which can be used to assist with market research, coding, and data analysis.
The company reported in July to have laid off a majority of its workforce in Beijing as it considered going global. Manus indicated that the Meta acquisition would have the company based in Singapore. The company claimed 105 workers in the South Asian country, Tokyo, and San Francisco in December.
Manus claimed to have surpassed $100 million in annual recurring revenue (ARR) in December, eight months after launching a product, which it said made it the fastest start-up in the world to have reached the mark, starting at $0.
Meta stated in a statement in December that “Manus’s exceptional talent will join Meta’s team to deliver general-purpose agents across our consumer and business products, including in Meta AI.”
Therefore, the acquisition comes after the company increased $75 million in a round led by U.S. VC Benchmark in April.
Nick Patience, AI lead at The Futurum Group, informed CNBC that China’s probe “underlines that [the country] considers advanced AI agents, models and related IP to be strategic assets.”
He added, “The most likely outcome I see is a lengthier approval process and potential conditions around how Manus technology developed in China can be used, rather than an outright block, but the threat of stricter action gives Beijing bargaining power in a high-profile, US-led acquisition.”
Meta’s Manus acquisition has spent billions of dollars to develop AI functionality in the face of competitors like OpenAI and Google. The company spent $14.3 billion on a 49 percent stake in AI startup Scale AI in June, which introduced founder and CEO Alexandr Wang to the tech giant as a member of the leadership team.
However, the Meta also declared that it was purchasing AI wearable startup Limitless in December.
CNBC previously indicated that Meta’s chief, Mark Zuckerberg, has been reallocating the Fundamental Artificial Intelligence Research (FAIR) division of the company to its more product-focused GenAI team to assist Meta in making progress in AI and enhancing its Llama family of AI models.
