China turns scrutiny on Meta’s $2B purchase of AI startup Manus

Meta’s $2 billion deal to buy Manus, an AI startup founded in China, is now under a wider investigation in Beijing.

What started off as a check on national security and tech exports has turned into a full-blown review of money transfers, tax reporting, and overseas investments. Officials are now digging through every part of the agreement.

The deal happened fast. Meta wrapped it up in about ten days last December. At the time, the company said it was part of a larger plan to build tools that help users get tasks done using artificial intelligence. But in China, the worry was whether sensitive data or tech had been handed over to the United States.

China follows the money and watches Singapore trail

The AI tools Manus built got attention earlier this year. It launched agents that help people do things like sort resumes, plan travel, and look up stocks using plain instructions.

The company said its service worked better than some parts of OpenAI’s Deep Research. That pulled in attention from investors and competitors like Baidu and ByteDance, who started working on their own versions.

But now, the attention is coming from the Chinese government. Officials started asking if the sale broke any rules. Now they’re also looking into how the money moved, if the taxes were right, and whether the entire overseas setup was legit. People close to the matter said the government is treating this seriously.

Manus didn’t stay in China. The company started in Beijing under a parent firm called Butterfly Effect. But by July, it had started moving workers to Singapore. It wasn’t a small change. Dozens of staff didn’t want to go and left. That raised red flags.

Officials noticed the exit and began asking if data was being sent abroad or if taxes were being dodged.

A lot of startups like Shein have moved out of China to get easier access to global markets. The term for this is “Singapore-washing.” Companies say it’s about growth. Officials see it as a possible cover to avoid local rules. For Manus, the timing and speed of the shift triggered deeper questions.

Deal already closed, but officials aren’t letting go

Even though the deal is done, that doesn’t mean China will let it slide. Meta now owns Manus, and the investors already got their payout.

That makes it hard to undo, but not impossible. A few officials had liked the company before the buyout. Now, with the company cutting all links to China, the tone has changed.

Some are also asking why no one looked into this earlier. The thinking was that Manus still had ties to China through older products like Monica, a browser extension that was still active inside the country. But the main AI service never launched in China at all. That kept the company off the radar for a while.

Now that it’s owned by Meta, the startup’s staff (around 100 people) are part of the U.S. tech giant. Alexandr, who runs AI at Meta, posted online that the team was joining. Red, who helped build Manus, said the deal would help reach more people. But what they say online doesn’t matter to the people doing the digging.

What matters is this: a major Chinese-born AI company was just bought by an American firm. And even if the product never hit Chinese servers, the roots were there. The government is still looking into how it all happened and what rules may have been broken.

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