Deal busted: China bans Meta from buying AI startup Manus

Chinese authorities have officially blocked the deal in which Meta planned to acquire AI startup Manus. This acquisition was supposed to be a landmark event in the artificial intelligence market, combining the resources of the social network with cutting-edge developments in the field of autonomous digital assistants. However, the tough stance of Chinese regulators and the export control law put an end to these ambitions.

Meta vs. Chinese regulators

The Chinese government intervened in the process of Meta’s acquisition of the startup Manus, which specializes in creating innovative artificial intelligence systems. According to the Financial Times, the deal, which is valued at record sums for the fledgling market for AI agents, was halted after scrutiny by Beijing’s investment authorities.

Regulators, including the National Development and Reform Commission (NDRC) and antitrust authorities, have notified both parties of the need to terminate the deal. An outright ban on “foreign investment” in Manus means Meta will not be able to access the company’s intellectual property.

What are autonomous AI agents

Manus has attracted the attention of technology giants with its development of “fully autonomous agents”. Unlike ordinary chatbots, such systems are able to independently plan and execute complex chains of tasks without constant user involvement. The technology is considered the next big breakthrough in the evolution of AI after LLM (large language models).

The developers of Manus are positioning their product as the world’s first AI agent with a high level of operational independence, which has made the startup a desirable target for Mark Zuckerberg.

Price issue

The value of the deal that did not take place was UAH 81.95 billion ($2 billion). For Meta, the acquisition was critical to strengthening its position in the AI ​​race, where the company competes with OpenAI and Google. The huge deal sum only underscores the value of the engineering talent and technology developed in-house at Manus.

Escape to Singapore and pressure from the authorities

The history of the Manus startup is full of drama. Despite its Chinese roots, the headquarters of the project was moved to Singapore last year after receiving American venture capital investment. However, this did not help to avoid Beijing’s influence.

• The Manus founders were banned from leaving China.
• Chinese officials called the attempt to sell Meta a “conspiratorial” attempt to weaken the country’s technological sovereignty.
• Beijing has used a wide arsenal of tools: from export control rules to foreign investment legislation.

Meta expressed confidence that the procedure will go smoothly and will not violate the laws of the PRC, but now the company refrains from commenting on the fiasco.