China has deepened a probe into Meta Platforms’ (META) $2B acquisition of Chinese-founded AI startup Manus, Bloomberg News reported.
Earlier this month, the Financial Times reported that China’s commerce ministry was reviewing the acquisition for potential violations of technology export controls. The early-stage assessment examined if Manus’s staff and tech relocation to Singapore required a Chinese export license before the sale.
The core issue is if Chinese technology or user data could have been compromised or shared with a U.S. company. Regulators are now also probing potential violations of rules governing cross-border currency flows, tax accounting, and overseas investments, the report added, citing people with knowledge of the matter.
Meta did not immediately respond to a request for comment from Seeking Alpha.
Manus’s co-founders and parent company, Butterfly Effect, began operations in China before moving its headquarters and staff to Singapore.
The probe into Meta’s acquisition is preliminary because it closed just weeks ago, and China could ultimately decide not to take any action, the report noted.
Some officials had privately shown support for Manus after the deal was announced. In addition, Manus’s backers have already received their money, making it difficult to unwind the transaction, the report added.
However, the deal has raised concerns in China as it marked a major U.S. company acquiring a well-regarded startup of Chinese origin that has been compared with the likes of OpenAI and China’s own DeepSeek. Its rise during that time attracted early U.S. backers, including venture investor Benchmark.
Manus started to relocate its staff to Singapore from Beijing and Wuhan in July 2025, parting ways with dozens of staff unwilling to move at the time. The move caught the attention of Chinese regulators, which privately raised concerns about cross-border data transfers and taxes, the report noted.
Manus has focused on international markets almost from the beginning, and its main agentic AI product has never been available in China. However, one of Butterfly Effect’s previous products — Monica, a Chrome browser extension — is available. Regulators did not start an investigation earlier on the presumption that the company would maintain close ties with China, the report added.
Manus is known for its AI agents that help execute tasks for users, such as screening resumes, creating trip itineraries, and analyzing stocks in response to basic instructions.