China Blocks Meta's Acquisition of AI Startup Manus: What You Need to Know

China's Decision on Meta's Acquisition

Hong Kong: On Monday, China announced its decision to block Meta's attempt to acquire Manus, an artificial intelligence startup that, while based in Singapore, has roots in China.

The National Development and Reform Commission, which is China's leading planning body, issued a brief statement indicating that it was prohibiting the foreign acquisition of Manus and instructed all involved parties to withdraw from the agreement. Notably, the statement did not mention Meta directly, the parent company of Facebook and Instagram.

This decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment, following an investigation into the deal that began earlier this year.

The commission did not provide specific reasons for the prohibition.

Meta had revealed its plans to acquire Manus back in December, marking a significant move for a major U.S. tech firm to purchase an AI company with strong ties to China. The acquisition was anticipated to enhance Meta's AI capabilities across its platforms, given Manus's ability to autonomously handle complex tasks through its 'general-purpose' AI agent.

Meta had assured that there would be 'no continuing Chinese ownership interests in Manus' and that the startup would cease its operations in China. However, in January, Chinese authorities announced they would investigate the acquisition's compliance with local laws.

China's commerce ministry emphasized that any companies involved in foreign investments, technology exports, data transfers, and cross-border acquisitions must adhere to Chinese regulations. Meta had previously stated that most of Manus's workforce is located in Singapore.

In response to the ban, Meta asserted that the transaction was 'fully compliant with applicable law' and expressed optimism for a favorable resolution to the ongoing inquiry.