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China Scrutinizes Meta’s $2 Billion AI Deal Over Security and Export Risks

By  |  January 7, 2026

Chinese authorities are examining whether Meta Platforms Inc.’s planned purchase of artificial intelligence startup Manus complies with national security and technology export rules, a preliminary inquiry that could complicate the transaction if problems are identified, according to Bloomberg.

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    Regulators have launched an initial assessment of the roughly $2 billion deal announced in December, people familiar with the matter told Bloomberg. Although Manus is now based in Singapore, officials are paying close attention to artificial intelligence technology that was developed when the company was operating in China, the people said, requesting anonymity because of the sensitivity of the review.

    It remains uncertain whether Beijing will ultimately classify Manus’ agentic AI technology as strategically important to national security. The software is designed to help users carry out tasks such as booking travel or organizing information. Per Bloomberg, the review is still at an early stage, and authorities may decide not to take further action.

    In other cases, however, similar reviews have evolved into formal investigations. According to Bloomberg, if regulators conclude that rules were breached, potential outcomes could include penalties or requirements that must be met before approval is granted. China has also been closely examining ByteDance Ltd.’s efforts to sell TikTok’s U.S. operations to American investors, a transaction that has yet to receive formal clearance.

    Related: Senators Press FTC, SEC to Investigate Meta Over Alleged Profits From Scam Ads

    The scrutiny reflects Beijing’s broader push in recent years to strengthen domestic technological capabilities and reduce reliance on foreign software and hardware, including in artificial intelligence. According to Bloomberg, much of this policy drive has focused on core components such as semiconductors and AI accelerators, though advanced software has also drawn attention.

    Meta’s proposed acquisition stands out as one of the few recent examples of a U.S. technology company seeking to buy a major Asian AI startup. The deal also represents another large-scale artificial intelligence investment by Meta Chief Executive Officer Mark Zuckerberg. Manus’ technology is capable of handling a range of general-purpose tasks, including reviewing resumes, planning travel itineraries and analyzing stocks based on simple user instructions.

    Manus is owned by Butterfly Effect Pte, a company that was founded in China before relocating its headquarters to Singapore, a transition completed only within the past year. According to Bloomberg, the startup has largely targeted international markets, and its AI product has never been offered inside China.

    The deal comes amid heightened political sensitivity around cross-border AI investments. San Francisco-based venture capital firm Benchmark faced criticism in 2025 from U.S. lawmakers and other investors for backing an AI company with connections to China, underscoring the growing scrutiny on technology funding and ownership across geopolitical lines.

    Source: Bloomberg