Meta’s Manus news is getting different receptions in Washington and Beijing

Quick Overview

Meta's $2 billion acquisition of AI assistant platform Manus faces regulatory hurdles in China, despite receiving approval in the U.S., due to concerns over technology export controls and Chinese startups relocating.

U.S. Approval: U.S. regulators appear assured of the deal's legitimacy, despite initial misgivings about Benchmark's investment in Manus.
Chinese Regulatory Scrutiny: China is reportedly reviewing if the deal violates technology export controls, specifically regarding Manus's relocation from Beijing to Singapore.
"Singapore Washing": Chinese officials are concerned about a trend of Chinese startups relocating to Singapore to dodge domestic oversight, potentially setting a precedent.
Potential Chinese Leverage: Beijing previously used similar export controls during the TikTok ban, suggesting it could intervene in the Meta-Manus deal.
U.S. Perspective: Some U.S. analysts view the acquisition as a win, indicating Chinese AI talent is migrating to the American ecosystem.

Key Points

Initial U.S. Concerns & Manus's Relocation

Meta's $2 billion acquisition of AI platform Manus initially faced U.S. regulatory scrutiny due to Manus's original ties to China.
An investment by Benchmark in Manus sparked controversy, prompting inquiries from the U.S. Treasury Department regarding new rules on American investment in Chinese AI companies.
These concerns led Manus to relocate its core team from Beijing to Singapore, described as a 'step-by-step disentanglement from China'.

China's Regulatory Intervention

Despite earlier U.S. regulatory misgivings about the deal being assured, Chinese regulators are now reportedly scrutinizing Meta's acquisition of Manus.
Beijing is reviewing whether the deal violates technology export controls, specifically if Manus required an export license when it moved its team from China to Singapore, a practice now dubbed 'Singapore washing'.
This move gives China potential leverage that was initially underestimated, with warnings of criminal liability for founders if restricted technology was exported without authorization.

Geopolitical Implications & Future Precedent

The deal highlights divergent receptions in Washington and Beijing, showcasing the complex dynamics of U.S.-China tech relations.
U.S. analysts view the acquisition as a win for Washington's investment restrictions, suggesting Chinese AI talent is defecting to a 'more attractive' American ecosystem.
Conversely, Beijing fears the deal could set a precedent, encouraging more Chinese startups to physically relocate to dodge domestic oversight, potentially creating 'a new path for the young AI startups in China'.