Meta’s ambitious push to catch up in the global AI race has hit a regulatory snag. This comes just weeks after announcing its planned takeover of AI startup Manus.
Chinese authorities have stepped up their scrutiny of the deal, creating fresh uncertainty about whether it will ultimately move forward.
In late December 2025, Meta announced it had acquired Manus, a Singapore-based AI startup founded in China by Xiao Hong in 2022. Meta framed the deal as a move into autonomous agent AI technology.
In practice, it marked a long-awaited entry into the AI space for a company known for chasing major technology shifts. It was less a surprise than an inevitability. So, why Manus?
Manus claims its AI systems can handle complex tasks such as research, coding, and workflow automation with minimal human input. While close US–China ties are rare, the company’s capabilities made it attractive to Meta.
Last year, Manus said it had reached $100 million in recurring revenue, making it one of the fastest startups to do so.
The acquisition was meant to quickly add advanced AI agent technology to Meta’s portfolio as it pushes deeper into AI. However, a big ‘Made in China‘ spanner has been thrown into the works.
Chinese regulators have launched a formal review of the deal under export control and technology transfer rules. This could significantly delay, alter, or even block the transaction.
Although Manus moved its headquarters to Singapore and Meta claims there will be “no continuing Chinese ownership or operations in China,” Beijing’s regulators are still asserting jurisdiction due to the company’s Chinese origins and initial development there.
Beyond the export control issues, the regulators have cited national security as a facet to launching the review while imposing strategic tech retention needs. China now treats AI technology as critical national asset.
Another concern is what regulators call “Singapore-washing.” This refers to Chinese companies relocating to Singapore to avoid strict regulations at home.
TikTok is often cited as a high-profile example. As a result, regulators want this deal to face close scrutiny to ensure it complies with export control rules.
It’s also important to note that no Meta platforms operate in China. Facebook was blocked in 2009 by the “Great Firewall.” Given this, it’s understandable why the acquisition might concern Chinese regulators, even though Meta maintains a significant, complex, and sometimes controversial business presence in the country.
If Chinese authorities intervene, the deal could be at risk, potentially slowing Meta’s AI plans. After stepping back from the metaverse, Meta has pivoted to AI, as shown by its fast acquisition of Manus. The company is currently behind its Silicon Valley peers in this field.
The most likely near-term outcome is China will take several months to complete its review. Regulators may approve the deal but impose conditions on how Manus technology is used or deployed.
They could require export licenses, propose changes to the transaction’s structure, or limit technology transfer, any of which could complicate Meta’s integration plans.
In the long term, China’s control over technology with Chinese origins, even after relocation, means continued scrutiny. In an extreme scenario, Beijing could demand the deal be reversed if tensions in the tech sector rise, though this is unlikely.
Even if the deal is ultimately approved, the review could force Meta to reconsider its AI strategy, including how it builds and integrates new capabilities in an increasingly competitive global AI landscape.
