China Launches Regulatory Probe Into Meta's Acquisition of Manus AI

China's Ministry of Commerce has formally announced an investigation into Meta's planned acquisition of AI platform Manus, signaling heightened regulatory scrutiny over foreign acquisitions of Chinese-origin technology. The probe, confirmed on Thursday, will examine whether the transaction violates China's export control regulations or foreign investment laws. This regulatory action comes despite Manus's efforts to distance itself from China by relocating operations to Singapore and reducing its Chinese workforce.

The compliance requirements center on two key regulatory frameworks: China's Export Control Law (effective December 2020) and the Foreign Investment Law (effective January 2020). Export controls mandate review of any transfer of "controlled items" including AI algorithms, training data, or proprietary technologies developed in China. The Foreign Investment Law requires examination of acquisitions that may impact national security or public interests. Meta must demonstrate that Manus's technology transfer doesn't include restricted AI components and that the acquisition structure complies with cross-border investment protocols.

Companies involved in similar cross-border tech acquisitions should note the compliance timeline. Investigations under China's regulatory framework typically follow a 30-day preliminary review period, after which authorities may initiate a 90-day in-depth investigation if concerns persist. Meta must submit documentation including:

• Full disclosure of Manus's technology portfolio
• Data flow mapping showing geographic locations of R&D assets
• Compliance certificates for all algorithms and training datasets
• Evidence of adherence to China's Personal Information Protection Law for user data

This probe occurs against a backdrop of China's intensifying focus on technological sovereignty. Recent policies include restrictions on domestic companies purchasing Nvidia's H200 GPUs despite U.S. export permission, and prolonged scrutiny of the TikTok ownership transition. The government appears concerned about establishing precedents where Chinese-developed technologies migrate overseas after benefiting from domestic talent pools and infrastructure. As one ministry official stated anonymously, "Innovation ecosystems nurtured domestically must not become export pipelines for foreign tech dominance."

For multinational corporations pursuing Chinese-origin AI assets, this case establishes critical compliance benchmarks. Firms should conduct three-phase due diligence: pre-acquisition audits of technology classifications, mid-transaction validation of export control compliance, and post-acquisition monitoring for ongoing regulatory adherence. Legal teams must particularly verify whether relocated entities maintain sufficient operational independence from Chinese development pipelines to avoid retroactive jurisdiction claims. With China implementing new AI governance regulations this year, including the Interim Measures for Generative AI Services, cross-border tech transfers face increasingly complex compliance landscapes.

The investigation's outcome will likely influence how China enforces its recently updated Regulations on Technology Export Prohibition and Restriction Catalogue, which added several AI-related items in 2025. Companies should monitor the Ministry of Commerce's final determination, expected within 120 days, for precedents on valuation methodologies for restricted technologies and acceptable data localization frameworks. Proactive engagement with China's Technology Import-Export Control Office is recommended before initiating similar acquisitions.