Meta’s $2 billion acquisition of AI assistant platform Manus has become entangled in a regulatory standoff — though not from U.S. authorities. American regulators appear satisfied that the deal is lawful, despite earlier concerns surrounding Benchmark’s investment in Manus. Chinese regulators, however, are reportedly taking a closer look, according to the Financial Times.
When Benchmark led a funding round for Manus earlier this year, the investment immediately drew scrutiny. U.S. Senator John Cornyn criticized the deal on X, and the investment triggered inquiries from the U.S. Treasury Department related to new rules limiting American capital flows into Chinese AI companies.
The backlash was significant enough that Manus ultimately relocated its headquarters from Beijing to Singapore. One Chinese academic described the move on WeChat as part of the company’s “step-by-step disentanglement from China.”
Now, the regulatory pressure appears to have shifted. Chinese authorities are reportedly examining whether Meta’s acquisition violates technology export control laws, potentially giving Beijing more influence than previously assumed. In particular, regulators are assessing whether Manus required an export license when it transferred its core team from China to Singapore — a practice that has become so widespread it’s informally known as “Singapore washing.” A recent Wall Street Journal report suggested China had limited ability to interfere due to Manus’s presence in Singapore, but that conclusion may have been premature.
Officials in Beijing are concerned that allowing the deal to proceed could incentivize other Chinese startups to relocate abroad to avoid domestic oversight. Winston Ma, a professor at New York University School of Law and a partner at Dragon Capital, told the Journal that a smooth closing would “create a new path for young AI startups in China.”
China has precedent for this type of intervention. During President Trump’s first term, Beijing used similar export control arguments to influence the attempted ban on TikTok. The Chinese professor who commented on WeChat even warned that Manus’s founders could face criminal charges if restricted technologies were exported without proper approval.
Meanwhile, some U.S. observers are framing the acquisition as evidence that Washington’s investment restrictions are working, arguing that Chinese AI talent is increasingly moving toward the U.S. ecosystem. One analyst told the Financial Times that the deal shows “the US AI ecosystem is currently more attractive.”
It remains unclear whether this scrutiny will affect Meta’s plans to incorporate Manus’s AI agent technology into its products. What is clear is that the $2 billion acquisition may prove far more complex than initially expected.