China has initiated a formal investigation into Meta’s $1.2 billion acquisition of AI agent startup Manus, focusing on potential violations of export control and national security regulations. The probe marks a growing regulatory hurdle for U.S. tech giants expanding into China’s AI ecosystem.
- China launched a formal review of Meta’s $1.2B acquisition of AI startup Manus on January 8, 2026
- Manus was valued at $850M at acquisition and had raised $320M in Series C funding
- The probe focuses on compliance with China’s 2024 Export Control Law and national security regulations
- Potential penalties include fines up to 10% of Meta’s China revenue, forced divestiture, or future investment bans
- The case signals broader regulatory caution toward foreign ownership of dual-use AI technologies in China
- Meta’s shares declined 2.3% in early Asian trading amid regulatory uncertainty
China’s Ministry of Commerce has launched a comprehensive review of Meta Platforms Inc.’s acquisition of Manus, a Beijing-based artificial intelligence startup specializing in autonomous agent systems. The investigation, confirmed on January 8, 2026, centers on whether the transaction complies with China’s 2024 Export Control Law and its 2023 National Security Review Framework. Manus, founded in 2022, had raised $320 million in Series C funding prior to the deal and was valued at $850 million at the time of acquisition. The transaction, completed in November 2025, was one of Meta’s largest non-platform acquisitions in Asia in the past three years. The probe underscores Beijing’s tightening grip on foreign ownership of advanced AI technologies. China has designated autonomous agent systems and large-scale language models as dual-use technologies, subject to stringent controls. Regulatory officials are examining whether the transfer of Manus’s core algorithms—particularly those related to real-time decision-making and multi-agent coordination—could pose risks to national security or technological sovereignty. The review may also assess whether Meta used shell entities in Singapore or the Cayman Islands to circumvent direct ownership rules. If found in violation, Meta could face penalties including fines up to 10% of its global revenue in China, forced divestiture of Manus, or a ban on future investments in Chinese AI firms. The outcome could set a precedent for foreign tech acquisitions in sensitive sectors, affecting companies like Alphabet, Microsoft, and NVIDIA, which are also pursuing AI partnerships in China. Market watchers note that Meta’s shares dropped 2.3% in early Asian trading following the announcement, reflecting investor concerns about regulatory risk in high-growth markets. The probe also highlights the growing divergence in global AI governance. While U.S. regulators have focused on antitrust and data privacy, China’s approach emphasizes strategic autonomy and control over foundational AI innovations. The Manus case may prompt further scrutiny of cross-border tech deals involving emerging AI capabilities, especially those with applications in defense, infrastructure, and critical infrastructure management.