According to TechCrunch, Meta’s $2 billion acquisition of AI assistant platform Manus is facing a new regulatory hurdle, but not from the U.S. Earlier this year, Benchmark’s investment in the Chinese startup sparked controversy, leading to a U.S. Treasury Department inquiry and complaints from Senator John Cornyn. This pressure contributed to Manus relocating its core team from Beijing to Singapore. Now, Chinese regulators are reportedly reviewing whether the Meta deal itself violates China’s technology export controls, specifically examining if the company needed an export license when it moved. This shift gives Beijing potential leverage in a deal many thought was cleared for takeoff after the company’s “Singapore washing” move.
Beijing’s New Leverage
Here’s the thing: everyone assumed the regulatory risk was a one-way street, flowing from Washington to Beijing. The U.S. had its concerns, Manus moved to Singapore, and that was that. But now the tables have turned in a pretty clever way. Chinese officials aren’t just looking at the money changing hands today; they’re looking back at the company’s physical exit from China. They’re asking if Manus took restricted technology with it without the proper paperwork when it relocated. That’s a powerful angle. It’s the same kind of export control mechanism China threatened to use during the whole Trump-TikTok ban drama. So, they’ve played this card before. This isn’t an empty threat—it’s a calculated move to assert jurisdiction over a company that thought it had left China’s regulatory reach.
The Bigger Picture for Chinese AI
This isn’t really just about $2 billion or one startup. Look, the real concern in Beijing is precedent. If this deal sails through, it basically creates a blueprint: build a hot AI startup in China, get “Singapore washed,” and sell to a U.S. tech giant. As NYU law professor Winston Ma pointed out, it “creates a new path for the young AI startups in China.” And that’s a path that leads talent, IP, and economic value right out of China’s ecosystem. Beijing wants to slam that door shut, or at least control the hinge. They want to signal that you can’t just pack up your algorithms and leave. One Chinese professor even warned the founders could face criminal liability. That’s a stark message to send to other entrepreneurs dreaming of a big Western payday.
A Win for America, or Just More Complexity?
Some U.S. analysts are spinning this as a win, arguing it shows American AI is so attractive that Chinese talent is defecting. And sure, on one level, that’s true. Meta gets a talented team. But does anyone really win in a world where every major tech deal becomes a geopolitical football? This $2 billion acquisition has now been scrutinized by U.S. lawmakers, investigated by the Treasury, and is facing a retrospective review from Chinese export controllers. That’s a lot of friction. It shows that in the current climate, even when a company tries to disentangle itself, the long arm of state oversight can still reach out. For Meta’s product teams waiting to integrate Manus’s tech, this probably means more delays and uncertainty. The deal got way more complicated than anyone anticipated, and it’s a case study in how messy global tech has become.
