Meta Stock: China Investigates $2 Billion Manus AI Acquisition Deal

TLDR

• Meta stock faces China investigation over $2 billion Manus AI startup acquisition for export control violations
• Singapore-based Manus originated in China before relocating, raising regulatory concerns about technology transfer
• The AI startup reached $100 million annual revenue in eight months after launching its AI agent product
• China’s Ministry of Commerce reviewing deal for compliance with technology export and national security laws
• Review could result in penalties, conditions for approval, or extended timeline for Meta’s AI acquisition

Meta stock is under scrutiny as China launches an investigation into the company’s $2 billion acquisition of AI startup Manus. The Ministry of Commerce confirmed the review on Thursday.

Chinese regulators are examining whether Meta violated export control laws. The deal closed in December 2024 after Meta acquired the Singapore-based AI company.

Officials are assessing national security implications. The review covers technology exports, imports, and overseas investment regulations.

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Manus began as part of Chinese startup Butterfly Effect, known as Monica.Im. The company relocated from China to Singapore in 2024 before Meta purchased it.

The AI startup developed an agent that performs market research, coding, and data analysis. Manus launched its first product in March 2024.

Fastest Growing AI Startup

Manus hit $100 million in annual recurring revenue by December. The company achieved this milestone just eight months after launch.

US venture capital firm Benchmark invested $75 million in Manus in April 2024. The funding drew criticism from lawmakers concerned about China-linked AI companies.

Manus cut most Beijing staff in July while pursuing global expansion. The startup operated with 105 employees across Singapore, Tokyo, and San Francisco.

Meta plans to integrate Manus into Meta AI products. The acquisition supports Meta’s push into AI automation for consumer and business applications.

Investigation Details

The Chinese government review is in early stages. Sources say regulators may choose not to intervene after completing their assessment.

Ministry spokesman He Yadong addressed the probe at a press briefing. He stated China supports cross-border business operations that comply with regulations.

These reviews can become formal investigations. Potential outcomes include penalties or required conditions before approval.

Beijing is also reviewing ByteDance’s TikTok US sale. That transaction has not received formal Chinese government approval.

China has pushed domestic companies to replace American technology. The focus includes AI accelerators and semiconductor development.

Analysts say China views advanced AI as strategic assets. The probe may extend approval timelines and add technology use conditions.

The deal marks a rare US acquisition of an Asian tech company. Meta CEO Mark Zuckerberg continues investing billions in AI development.

Neither Meta nor Manus commented on the investigation. The review timeline remains uncertain as Chinese officials assess compliance with export control laws.