Home / Business and Economy / China Unwinds Meta AI Deal Over Security Fears
China Unwinds Meta AI Deal Over Security Fears
27 Apr
Summary
- China's regulator ordered Meta's $2.5 billion AI acquisition unwound.
- Concerns over national security grounds led to the ban.
- The move reflects a broader tech race between the US and China.
China's National Development and Reform Commission has ordered Meta Platforms to unwind its $2.5 billion acquisition of artificial-intelligence startup Manus. The regulator cited national security grounds for banning the deal, which was finalized in late December. Early versions of Manus's AI agent were developed by a Chinese company, Beijing Butterfly Effect Technology, founded in 2022.
Manus later relocated many of its China-based employees to Singapore and received investment from a US venture-capital firm before Meta's acquisition. Chinese authorities initiated a review in January, emphasizing compliance with laws regarding cross-border acquisitions and technology exports. The inquiry reflects Beijing's efforts to protect its AI know-how amidst escalating technology competition with the United States.
The situation highlights China's broader strategy to safeguard its technological advancements. Regulators are concerned that Manus's actions could encourage other Chinese companies to move operations abroad without official approval. Both the US and China have recently tightened export controls and investment restrictions in the technology sector.
