According to The Wall Street Journal, China’s Ministry of Commerce announced on Thursday it is reviewing Meta’s recent acquisition of the artificial intelligence startup Manus, a deal valued at $2.5 billion. The startup, known for its advanced AI agent that handles complex tasks like writing reports and planning trips, was founded in China but moved its headquarters to Singapore last year. A ministry spokesman stated that cross-border deals and tech exports “must comply with Chinese laws and regulations.” This review is the first of its kind for a high-profile AI startup with Chinese roots being bought by a U.S. tech giant, and it’s part of a broader effort by Beijing to identify and potentially restrict the export of strategically important AI technologies developed by Chinese researchers.
Beijing’s Real Target
Here’s the thing: this review isn’t really about blocking this specific deal. I mean, the founders are in Singapore, the company is shutting down its China operations, and frankly, the tech itself—while clever—isn’t considered as critical as semiconductors. So what’s the point? It’s a shot across the bow. Officials are reportedly irritated that Manus showed a clear blueprint: incorporate abroad, downplay Chinese ties, and sell to a deep-pocketed American buyer. They’re terrified this becomes a well-trodden path for every talented AI engineer and founder in the country, draining China’s innovation pool right when the tech race with the U.S. is intensifying. It’s a message to the startup ecosystem: your genius is a national asset, not just your personal ticket to riches.
A Familiar Playbook with Limited Tools
Beijing has done this before, most notably with the algorithms behind TikTok in 2020. That gave them direct veto power and leverage. But this situation is murkier. The company already left. So what can they actually do? The immediate leverage seems weak. But look at the bigger picture—they’re signaling an intent to build “fences,” as the WSJ puts it. They’re compiling lists of standout companies and tech for potential export controls. The real power here is creating uncertainty. For a global investor, seeing China suddenly review a deal for a company that’s already based in Singapore is a massive red flag. It makes every future deal involving any Chinese-born talent feel risky and potentially subject to last-minute, costly regulatory hurdles. That chilling effect might be the whole goal.
The Startup Dilemma and Global Spillover
This puts ambitious Chinese AI founders in a brutal bind. The domestic market is ferociously competitive and often offers lower valuations. The Silicon Valley path promises global scale, legendary status, and life-changing money. But now, Beijing is basically saying, “Not so fast.” We’re going to see more companies doing the Singapore shuffle, trying to legally distance themselves while knowing their tech’s origins might always be scrutinized. And it’s not just AI. Remember Shein? Its IPO plans got tangled up with Chinese regulators because its supply chain is still rooted there. Basically, if your brainpower or your factory floor is in China, the government is increasingly asserting that it has a say in your global destiny, no matter where you incorporate. That’s a huge new variable for the entire global tech industry to price in.
