China has expanded its scrutiny of Meta’s roughly $2 billion acquisition of AI startup Manus, widening the scope of a regulatory review that is now raising questions beyond national security and technology transfer, according to reports citing people familiar with the matter.
The deal, one of Meta’s most high-profile AI moves in years, involves Manus — an “agentic AI” startup with Chinese roots that gained attention for building tools designed to carry out complex tasks with minimal user prompting. Meta’s purchase was viewed as a major milestone for the company, but it has also become a flashpoint for Beijing’s growing sensitivity around strategic technology and talent moving offshore.
Chinese officials had already started looking into whether the takeover triggered concerns linked to technology export controls or national security rules. Now, the expanded review reportedly includes additional areas such as cross-border currency flows, tax accounting practices, and compliance issues tied to overseas investments — increasing the possibility that regulators could demand changes to the transaction, impose penalties, or in an extreme scenario attempt to unwind parts of the deal if violations are found.
One of the core issues being examined is whether sensitive technology or user data could have been compromised through a transfer to a US-based company. This question has become more politically charged as China tightens its posture on “strategic assets,” especially in AI, where the government has pushed to protect domestic innovation while also maintaining global competitiveness.
The case also highlights the complications that arise when a company’s identity crosses borders. Reports indicate Manus has links to China through its founding and early operations, but has also operated internationally, including restructuring outside mainland China. That kind of shift can trigger multiple regulatory questions in China around what exactly moved, when it moved, and whether approvals were required at any stage of the process.
Despite the expanded probe, the outcome remains uncertain. Some officials have reportedly viewed Manus as a success story, and reversing a deal after funds have already been distributed to investors can be difficult in practice. Still, the growing attention is being watched as a signal that Beijing may take a more aggressive stance toward major foreign acquisitions involving Chinese-founded advanced-tech firms — even if those companies have since shifted their headquarters or operations abroad.
For Meta, the investigation adds another layer of complexity to its AI strategy as it ramps up investment in next-generation products and infrastructure. It also reinforces how geopolitical and regulatory risk has become a key factor in AI M&A, especially when deals touch on sensitive technologies, cross-border talent migration, and data governance.