Beijing looms large over Singapore-based Manus’ deal with Meta
The swift scrutiny shows fears Manus’ sale could spur more tech stars to follow the same path
[SHENZHEN] It took just 10 days for Meta’s acquisition of Manus to run into Beijing’s cross hairs, months after the Chinese-founded artificial intelligence (AI) start-up moved to Singapore without apparent incident.
China is reviewing whether the reported US$2.5 billion deal flouted its laws, testing how far Beijing’s oversight extends over technology with Chinese origins and the limits of redomiciling in neutral third countries like Singapore amid sharpening US-China competition.
Beijing’s swift scrutiny reflects worries that Manus’ high-profile sale might prompt more of the country’s tech stars to chase the same path, hollowing out the best of Chinese AI and funnelling it to America, analysts say.
China fears that promising tech companies might “run away like Manus”, said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. “The Chinese government doesn’t want Manus’ case to have a ripple effect.”
From China to Singapore, then Meta
Founded in China with offices in Beijing and Wuhan, Manus had a whirlwind 2025 that saw it gain international attention, move to Singapore, and end up with the American tech giant in just nine months.
It develops an AI agent designed to do complex tasks such as making PowerPoint presentations, apps and websites, distinct from chatbots which typically need more human guidance.
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Manus made global headlines when it launched a trial of this AI agent in March 2025, shortly after fellow start-up DeepSeek drew attention to China’s AI advances.
In April 2025, Manus secured investments from prominent US venture capital firm Benchmark, which led a funding round worth US$75 million. But that reportedly drew scrutiny in Washington as new rules restricting some American investments in Chinese AI firms kicked in that year.
Against this backdrop, Manus’ parent, Butterfly Effect, relocated from China to Singapore in mid-2025, reportedly moving its core team to the Republic while shedding most of its China-based staff. And to cap the year, Manus announced on Dec 29 that it would join Meta, a move celebrated by some in China as an affirmation of the country’s innovation prowess.
Beijing’s long arm
But now, it is Beijing’s turn to scrutinise the deal, tapping an expanding regime of export controls that observers say mirror US rules to restrict Chinese access to American technology.
On Jan 8, a Commerce Ministry spokesman said China would conduct an “assessment and investigation” into whether the acquisition complied with the country’s laws and regulations on export controls, technology exports and outbound investments.
Even though the deal is between Singapore and US companies, China’s basis for reviewing it rests on the ostensibly Chinese origins of Manus’ technology, said Dai Menghao, a partner at international law firm King & Wood Mallesons in Shanghai who works on export controls.
Beijing prohibits or restricts the export of certain technologies, the latter of which require approvals, and part of the regulators’ job will be to assess whether Manus’ technology falls within that remit.
Economics professor Cui Fan, who is an adviser to the Commerce Ministry, said in a Jan 3 commentary on WeChat that a key issue surrounded when, how and what technologies were transferred out of China from Manus’ entities based there.
He did not say if Manus’ technologies were covered by export restrictions but observed that some restricted items like “personalised information push service technology based on data analysis” were related to AI companies.
He also highlighted the people comprising Manus’ core team, noting that there was no confirmation that they had given up their Chinese nationality nor that they were exempt from Chinese jurisdiction.
It is unclear how long Beijing’s review will take as there are no statutory deadlines, said Dai. In the worst-case scenario, China could block the sale or even impose civil or criminal penalties on the company and people in charge, he added.
The limits of redomiciling
Manus’ regulatory woes are the latest example of the limits to third-country domiciling, as both the US and China grow increasingly cautious about protecting their cutting-edge technologies.
University of Southern California law professor Angela Zhang, who is an expert on Chinese tech regulation, said: “Chinese firms seeking to expand overseas face heightened scrutiny not only from US regulators, but also from their own government.”
Prompted in part by growing US restrictions on Chinese access to American funds and technology, Chinese companies have been setting up shop in countries like Singapore, hoping that a neutral identity will give them more room to tap deep-pocketed foreign investors and expand abroad.
But they are also learning that there are limits to this cover. Manus’ Singapore identity did not give it a free pass from Beijing to proceed with the Meta deal unchecked. Fast-fashion giant Shein, although headquartered in Singapore, reportedly still needed Beijing’s approval for overseas listings, as did the American divestment of Singapore- and US-headquartered TikTok.
The Commerce Ministry’s review “will remind other tech companies with global ambitions that their actions are always subject to Beijing’s scrutiny”, said Lu Xiaomeng, director for geo-technology at Eurasia Group, a political risk consultancy.
Treading a fine line
How the Manus deal plays out will be a case study for Chinese tech firms weighing how to expand abroad without crossing the government’s red lines, analysts say, even as it is a unique example.
Unlike many companies that retain operations in China, even while domiciling in Singapore, Manus effectively shed its entire Chinese presence and got acquired by the US to boot, said Bo Zhengyuan, a partner at research consultancy Plenum in Shanghai. That sale was likely the last straw for Beijing, surmised Dai, pointing out that China may have been able to tolerate Manus’ move to Singapore, “but a transfer of technology to the US that indirectly strengthens Meta’s competitiveness is something else”.
Meta has not had an easy relationship with the Chinese authorities – its main social media platforms like Facebook, Instagram and WhatsApp are blocked in the country.
Chinese regulators now have a fine line to tread. In calling out the Manus deal, they want to make sure that the country’s AI companies do not learn the wrong lesson, and follow it out of Beijing’s orbit.
But throwing the rulebook against it also risks sending the wrong message: that these technologies, if so entangled in Chinese law, may best be developed somewhere else. THE STRAITS TIMES
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