Shares in Meta Platforms (META) were lower today on fears that its $2 billion acquisition of Singapore-based agentic AI startup Manus could collapse after Chinese authorities deepened their review of the deal.
Claim 50% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Chinese Fear Data Sharing
Earlier this month it was revealed that Chinese officials had started looking into the deal, announced last December, and whether it could violate technology export or national security regulations. The central issue is whether Chinese technology or user data could have been compromised or shared with an American company.
That’s because Manus began as Butterfly Effect, a Beijing-based company, before it spun out and moved to Singapore in June 2025.
Chinese officials are assessing whether the relocation of Manus’ staff and technology to Singapore and the subsequent sale to Meta requires an export license under Chinese law.
It is now understood that regulators are also investigating potential violations of rules governing cross-border currency flows, tax accounting and overseas investments. Sources have said that some officials viewed the startup as a symbol of China’s AI capabilities and were concerned that the sale could provide the U.S. with access to technology developed by Chinese engineers.
This increases the risk that China could change the deal or even unwind it if it has significant concerns.
Meta Playing Catch Up
Manus drew attention earlier in 2025 on X by releasing what it said was the world’s first general AI agent, able to make decisions and complete tasks with minimal prompting, unlike chatbots such as ChatGPT and DeepSeek.
Meta has said it will continue to operate and sell the Manus service. It also plans to integrate the technology into Meta AI and other consumer and business products.
The acquisition fits into Meta’s broader AI strategy, which is shifting away from basic AI features toward tools that can act more independently. It is also ramping up hiring to build a deeper AI team to take on rivals such as Google (GOOGL) and Microsoft (MSFT) and shift away from its previous focus on virtual reality and the Metaverse – see below.
The investigation into Meta’s takeover remains preliminary and Beijing could ultimately decide not to take any action. Indeed, some officials reportedly privately expressed support for Manus after the deal got announced.
What are the Best AI Stocks to Buy Now?
We have rounded up the best AI stocks to buy now using our TipRanks comparison tool.
