China Intensifies Scrutiny of Meta’s $2B Acquisition of AI Startup Manus

Chinese regulators have escalated their examination of Meta's rapid $2 billion acquisition of AI startup Manus, shifting from initial national security concerns to a comprehensive audit of financial flows, tax compliance, and overseas investment structures. The deal, completed in just ten days last December, now faces unprecedented bureaucratic scrutiny.

Manus gained attention earlier this year for developing AI agents capable of resume sorting, travel planning, and stock analysis through natural language commands. The startup claimed superiority over certain OpenAI capabilities, attracting competitive responses from Chinese tech giants Baidu and ByteDance before becoming a regulatory target.

The Beijing-born company, originally under parent firm Butterfly Effect, had already relocated offshore by July—a MOVE that now forms part of the investigation into whether the transaction violated China's capital controls and technology transfer regulations.