Meta news on Manus receives different receptions in Washington and Beijing

Meta’s $2 billion acquisition of AI support platform Manus is unsurprisingly caught in a regulatory tug-of-war – but not because of US regulators. They appear convinced of the legitimacy of the deal, despite fears over Benchmark’s investment in Manus. However, Chinese regulators are reportedly not as optimisticaccording to the Financial Times.

When Benchmark led a funding round for Manus earlier this year, the investment immediately sparked controversy. U.S. Senator John Cornyn complained about the X deal, and the investment sparked investigations by the U.S. Treasury Department over new rules restricting U.S. investment in Chinese AI companies.

The concerns were significant enough to prompt Manus to ultimately move from Beijing to Singapore — part of what drove the company’s “gradual disengagement from China,” as a Chinese professor described it on WeChat last weekend.

Today, the situation has been reversed. Chinese officials are reportedly reviewing whether the Meta deal violates controls on technology exports, potentially giving Beijing leverage it was not initially perceived to have. Specifically, they are examining whether Manus needed an export license when it moved its core team from China to Singapore – a move that is apparently so common today that it earned it the nickname “Singapore Wash.” A recent Wall Street Journal article He speculated that China had “few tools to influence the deal given Manus’ presence in Singapore”, but that assessment may have been premature.

The concern in Beijing is that the deal could encourage more Chinese startups to physically relocate to escape domestic surveillance. Winston Ma, a professor at New York University Law School and a partner at Dragon Capital, told the Journal that if the deal closes without a hitch, “it would create a new path for young AI startups in China.

History suggests Beijing could act. China previously used similar export control mechanisms to intervene in Trump’s attempted ban on TikTok during his first term. The Chinese professor even warned on WeChat that the founders of Manus could be held criminally liable if they exported restricted technology without authorization.

Meanwhile, some U.S. analysts are calling the acquisition a victory over Washington’s investment restrictions, arguing that it shows Chinese AI talent is defecting to the U.S. ecosystem. An expert told the FT that the deal demonstrates that “the US AI ecosystem is currently more attractive”.

It’s too early to know whether this will impact Meta’s plans to integrate Manus’ AI agent software into its products, but the $2 billion deal may have become more complicated than expected.