Meta Platforms Inc., the U.S.-based tech giant, is under regulatory scrutiny by the Chinese Ministry of Commerce following its acquisition of the artificial intelligence startup Manus. The acquisition, valued at over $2 billion, has prompted Chinese authorities to investigate whether the transfer of Manus' technology and employees to Singapore before the sale complied with Chinese export control laws. This review remains in preliminary stages but carries the potential to influence the transaction's outcome, including the possibility of halting the deal.
Manus is currently managed by Butterfly Effect Pte, a company based in Singapore. However, its roots trace back to Beijing, where a sister company was established in 2022 by CEO Xiao Hong and associates. Although Manus' registration remains in Beijing, the offices appeared vacant as of August, suggesting a significant operational shift. This move to Singapore came after securing funding led by U.S. venture capital firm Benchmark, a development that also attracted close examination under recent U.S. Treasury regulations governing American investments in Chinese AI enterprises.
Upon acquiring Manus, Meta positioned the deal as a strategic effort to bolster its AI technology prospects. Officially announced in late December, Meta's plan involves integrating Manus’ innovations into its product lineup, enhancing its competitive posture within the artificial intelligence sector. This acquisition complements a broader initiative including earlier purchases such as Scale AI, emphasizing Meta's drive to advance in this rapidly evolving technological landscape while seeking advantages over competitors like OpenAI.
The ongoing review by Chinese authorities arises amid heightened geopolitical and technological competition between the United States and China. The scrutiny of this deal symbolizes larger concerns about cross-border technology transfer and the safeguarding of national technological capabilities. For Meta, the outcome of this regulatory assessment not only impacts the Manus acquisition but may also shape its access and operational scope within China’s market.
In terms of market performance, Meta's stock has experienced a moderate increase, with a 6.92% rise over the past year. Most recently, the stock recorded a small uptick of 0.28%, closing at $660.62. The company holds a momentum rating of 27.15% and a quality rating of 95.60% according to proprietary rankings, reflecting its strong market position despite the regulatory challenges.
Meta has not issued a public comment regarding the Chinese government's evaluation of the Manus transaction. As the review progresses, industry observers and market participants will monitor closely for developments that could affect Meta’s technology acquisition strategy and international operations.