China’s state planner on Monday urged Meta to reverse its $2 billion acquisition of Manus, a Singapore-based AI firm with origins in China.
The rationale for blocking foreign investment in Manus was presented in accordance with relevant laws and regulations, as stated by the National Development and Reform Commission in a concise announcement. It also mentioned that involved parties were instructed to retract the acquisition deal.
CNBC has reached out to Meta for a response. Shares dipped 0.2% in premarket trading.
The arrangement had drawn attention from both Beijing and Washington, with U.S. lawmakers having restricted American investors from directly supporting Chinese AI enterprises. Concurrently, China has intensified efforts to dissuade local AI entrepreneurs from taking their businesses abroad.
The intervention by the Chinese government regarding the deal raised concern among tech founders and venture capitalists in the nation who were eager to benefit from the so-called “Singapore-washing” strategy, which involves companies migrating from China to the city-state to evade scrutiny from both Beijing and Washington.
Originating in China, Manus relocated to Singapore. The firm specializes in developing versatile AI agents and introduced its initial general AI agent in March of the previous year, capable of performing complex tasks including market research, coding, and data analysis. This launch positioned the startup as a contender to be the next DeepSeek.
Manus reported surpassing $100 million in annual recurring revenue (ARR) in December, merely eight months post-launch of its product, claiming it was the fastest startup globally to achieve this milestone from zero.
The company secured $75 million in a funding round led by U.S. VC Benchmark in April of last year.
When Meta disclosed the deal late last year, the tech powerhouse indicated it aimed to expedite AI advancements for businesses and integrate sophisticated automation into its consumer and enterprise offerings, including its Meta AI assistant.
However, in January, China’s Ministry of Commerce announced it would conduct a review and investigation into the acquisition’s adherence to laws and regulations related to export controls, technology import and export, and overseas investment.
A spokesperson for Meta informed CNBC in March that its acquisition “was in full compliance with the applicable law,” and that the team expected “an appropriate conclusion to the inquiry.”
In response to inquiries regarding China’s decision to block Meta’s Manus acquisition, APEC Senior Officials Meeting Chairman Chen Xu remarked that it is “crucial for all parties to operate with a mindset of mutual benefit.”
While Chen stated he was not familiar with the details of the situation, he commented that “if such a matter can be resolved effectively, it can foster more meaningful discussions within APEC.” This insight is based on an official English translation from the Chinese.
— CNBC’s Anniek Bao and Dylan Butts contributed to this story.
