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Chinese officials are reviewing Meta’s $2bn purchase of artificial intelligence platform Manus for possible technology export control violations, in a move that potentially gives Beijing leverage over the high-profile transaction.
The deal announced last week is a rare case of a US group acquiring a cutting-edge AI start-up with Chinese roots at a time when Washington and Beijing are locked in an increasingly fraught competition over a range of advanced technologies.
Two people familiar with the matter said officials in the commerce ministry had begun assessing whether the relocation of Manus’s staff and technology to Singapore and the subsequent sale to Meta required an export licence under Chinese law.
While the review is in its early stages and might not lead to a formal investigation, the need for a licence could provide Beijing with an avenue to influence the transaction, including trying to force the parties to abandon the deal in an extreme case, the people said.
China used a similar mechanism to intervene in Washington’s attempted forced sale of TikTok during US President Donald Trump’s first term.
The Manus deal has drawn attention in Beijing because of concerns that it could incentivise Chinese start-ups to physically relocate out of the country to bypass domestic supervision, one of the people said.
However, the second person noted that Manus’s product, an AI-powered assistant, was not considered core technology vital to China, reducing the urgency for intervention.
Opening a second headquarters or offices in Singapore has become so common among Chinese companies seeking global customers that the practice has become known as “Singapore washing” to describe the effort to shed the geopolitical sensitivities associated with operating from China.
The Chinese groups in Singapore have typically retained operations in their home country, but the core team behind Manus moved to the city-state in the summer of 2025, leaving few clear options for Beijing to intervene if officials decide action is warranted. Meta’s products, including Facebook, Instagram and WhatsApp, are blocked in China.
Manus is operated by Singapore-based Butterfly Effect Pte. The product was developed at least in part by sister company Beijing Butterfly Effect Technology, which Manus’s founders including chief executive Xiao Hong set up in 2022.
The entity remains registered in Beijing though its offices were empty when the Financial Times visited in August. Meta plans to operate the Manus AI agent software and integrate the technology into its own products.
Manus’s relocation to Singapore followed a financing round led by US venture capital firm Benchmark that prompted inquiries from the US Treasury department around new rules restricting American investment in Chinese AI.
“Manus’s step-by-step disentanglement from China was undeniably propelled by US investment restrictions,” said Cui Fan, a professor at the University of International Business and Economics, in a public WeChat post on Saturday.
Cui suggested that any Chinese review of the Meta purchase should centre on whether the Manus team developed export-controlled technologies while in China.
“If unauthorised export of restricted technologies is confirmed, legal liability may arise . . . [including] criminal liability,” he wrote. “Believing that quickly severing ties with China can bypass both US and Chinese regulatory regimes may be overly simplistic.”
In the US, some analysts have lauded Meta’s purchase as a win for Washington’s outbound investment restrictions.
“The Manus acquisition shows that US restrictions on investment and AI chip exports are causing two distinct AI ecosystems to develop — the US AI ecosystem and the Chinese AI ecosystem,” said Chris McGuire, a senior fellow at the Council on Foreign Relations. “Manus’ defection shows that the US ecosystem is currently more attractive.”
Manus declined to comment. China’s commerce ministry and Meta did not respond to requests for comment.
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