China Expands Regulatory Scrutiny of Meta's Manus Acquisition Amid Broader Tech Tensions

Chinese authorities have significantly deepened their probe into Meta Platforms' recent $2 billion acquisition of Shanghai-based AI startup Manus, according to sources familiar with the matter. The investigation, which began shortly after the deal's announcement in December, now focuses specifically on cross-border currency flows, tax accounting practices, and overseas investment structures. This move signals Beijing's increasingly assertive stance toward foreign acquisitions of Chinese tech assets, particularly those involving emerging technologies deemed strategically important.

The expanded scrutiny reportedly stems from concerns officials described internally as "selling young crops" – a phrase suggesting apprehension about premature transfer of promising domestic technology to foreign entities. This terminology reflects broader anxieties within China's regulatory apparatus about losing control over next-generation innovations. The probe coincides with Meta's ongoing efforts to expand its AI capabilities globally, positioning Manus' computer vision and generative AI technology as central to its competitive roadmap.

This investigation occurs against a backdrop of escalating US-China tech tensions. Parallel developments include ByteDance's complex restructuring of TikTok to avoid a US ban through a new majority-American owned joint venture, and ongoing restrictions around advanced semiconductor exports. Multiple analysts note that China's regulatory actions appear calibrated to mirror US containment efforts targeting Chinese tech firms, creating a tit-for-tat dynamic. "Beijing is demonstrating its capacity to scrutinize Western tech giants with the same rigor that Washington applies to companies like Huawei or ByteDance," commented a Hong Kong-based fintech policy advisor who requested anonymity due to client sensitivities.

Counterbalancing this perspective, some trade policy experts argue the probe reflects legitimate concerns about capital flight and tax compliance rather than pure geopolitical maneuvering. They point to China's broader campaign to stabilize cross-border financial flows amid economic headwinds, noting increased audits of multinational corporations across sectors. Meta has not publicly commented on the investigation's expansion, but internal sources suggest the company anticipated extended regulatory processes given the acquisition's scale and geopolitical sensitivities. The transaction remains in limbo pending the investigation's conclusion, forcing Meta to delay integration plans for Manus' technology.

The probe's implications extend beyond Meta. Companies like Alibaba, Tencent, and ByteDance are simultaneously navigating partial approvals for importing advanced Nvidia AI chips, indicating Beijing's selective approach to technology governance. This dual-track strategy – restricting critical exports while scrutinizing inbound acquisitions – reveals China's attempt to balance technological self-sufficiency with controlled international engagement. For foreign investors, the Manus case establishes a precedent requiring deeper due diligence around tax structures and capital movement documentation when acquiring Chinese tech assets.

Legal specialists highlight that investigations of this nature typically last six to nine months, potentially pushing resolution into late 2026. Possible outcomes range from unconditional approval to mandated divestiture of specific technologies, though most analysts anticipate negotiated concessions around data localization or operational restrictions. The process underscores how geopolitical fissures are reshaping global tech M&A, forcing companies to weigh strategic acquisitions against escalating regulatory uncertainty in an increasingly fragmented digital landscape.

As US-China tech decoupling accelerates, the Manus investigation exemplifies how mid-sized acquisitions now trigger disproportionate regulatory attention. Where previous administrations might have approved such deals routinely, current political conditions transform them into proxy battles over technological sovereignty. This reality complicates growth strategies for both Western tech giants seeking AI talent and Chinese startups pursuing global exits, suggesting fundamental shifts in how cross-border innovation ecosystems will operate in the coming decade.