Meta’s proposed $2 billion acquisition of AI assistant platform Manus is shaping up to be a regulatory contest—but not the one many expected. In Washington, officials appear increasingly comfortable that the deal is compliant with U.S. rules, even after early scrutiny of Manus’s funding history. In Beijing, however, regulators are reportedly taking a harder look, raising questions about export controls, talent relocation, and whether China still holds leverage over a company that has already moved offshore.
According to reporting by the Financial Times, Chinese authorities are assessing whether the transaction could violate technology export restrictions—an angle that could complicate a deal many believed was largely beyond Beijing’s reach.
From U.S. Scrutiny to Strategic Relocation
The controversy began earlier this year when Benchmark led a financing round for Manus. The investment triggered immediate backlash in Washington. U.S. Senator John Cornyn publicly criticized the deal, while the U.S. Treasury Department initiated inquiries under new rules aimed at restricting American capital from flowing into Chinese AI firms.
Those concerns proved consequential. Manus subsequently relocated its headquarters from Beijing to Singapore, a move that insiders described as part of a “step-by-step disentanglement from China.” The shift aligned with a broader trend among Chinese-founded tech startups seeking regulatory certainty and global capital access outside the mainland.
At the time, many observers concluded the relocation largely insulated Manus—and any potential acquirer—from Chinese oversight.
Beijing Reasserts Influence
That assumption may have been premature. Chinese regulators are now reportedly examining whether Manus required an export license when it moved core personnel and capabilities from China to Singapore. The practice—so common it has earned the nickname “Singapore washing”—has become a favored route for startups seeking to escape tightening domestic controls.
The Wall Street Journal recently suggested that China had “few tools” to influence the Meta-Manus deal given Manus’s new foothold in Singapore. Yet the renewed focus on export controls hints at a different reality: Beijing may still be able to exert pressure after the fact.
The concern, according to analysts, is less about this specific transaction and more about precedent. If the deal proceeds smoothly, it could encourage a wave of Chinese AI startups to relocate talent and intellectual property abroad to bypass domestic oversight.
A Signal to the Startup Ecosystem
That possibility is not lost on policymakers. New York University School of Law professor and Dragon Capital partner Winston Ma told the Journal that a clean closing would “create a new path for young AI startups in China.” In effect, it would validate a blueprint for exit—move first, then sell globally.
Some Chinese commentators have gone further. A professor writing on WeChat warned that Manus’s founders could face criminal liability if restricted technologies were exported without authorization, underscoring how seriously Beijing treats outbound flows of advanced AI capabilities.
History suggests the threat is not idle. China previously used export control mechanisms during former U.S. President Donald Trump’s attempted ban of TikTok, leveraging regulatory approvals to protect national interests.
Diverging Interpretations in Washington
In the United States, the narrative looks very different. Some analysts see Meta’s acquisition as a validation of Washington’s tightening investment rules rather than a failure of them. From this perspective, the deal demonstrates that Chinese AI talent is migrating into the U.S.-aligned ecosystem—bringing expertise, not capital, with it.
One U.S.-based expert quoted by the Financial Times argued that the transaction shows “the U.S. AI ecosystem is currently more attractive,” particularly for founders seeking scale, compute access, and global distribution.
That framing casts the acquisition as a strategic win for American tech rather than a regulatory loophole.
What’s at Stake for Meta
For Meta, the stakes are high. Manus would bolster the company’s AI assistant ambitions at a time when competition from OpenAI, Google, and emerging startups is intensifying. But the deal’s geopolitical undertones add risk that goes beyond traditional antitrust review.
If Chinese regulators decide the relocation violated export rules, Beijing could delay approvals, impose penalties, or create uncertainty that chills similar exits. Even if the deal ultimately closes, the scrutiny alone may reshape how Chinese-founded AI companies plan international expansion.
A Deal That Redefines Leverage
The Meta-Manus saga underscores a broader shift in global tech governance. Regulatory power is no longer confined to the jurisdiction where a company is headquartered or acquired. Instead, it follows talent, data, and intellectual property across borders.
For now, Meta appears confident it can navigate the process. But as Beijing reassesses its tools, the acquisition is becoming a test case—not just for one company, but for how far national regulators can reach in an era of globally mobile AI startups.
