China’s Regulatory Toolkit for Meta’s Acquisition of Manus
On 29 December 2025, global technology giant Meta announced a multi-billion-dollar acquisition of Manus, an artificial intelligence start-up with Chinese roots.
Manus had previously completed a series of “offshore restructuring” steps, including relocating its headquarters to Singapore and ceasing services in China. These moves complicate what would typically be a straightforward cross-border technology acquisition.
Regulatory Framework
Cross-border transactions are subject to oversight across various jurisdictions, particularly concerning antitrust review and national security review. In the AI sector, scrutiny extends beyond market share to encompass the flow of algorithmic models, training data, and key talent.
1. Background: Transaction Structure and Target Assets
Manus, originally an AI project incubated by Beijing Butterfly Effect Technology Co., Ltd., was launched in March 2024 and quickly gained attention for its performance. To mitigate risks associated with foreign investment reviews, Manus underwent offshore restructuring in July 2025, relocating to Singapore.
Reports suggest that the deal may adopt an “acquihire” model instead of a traditional equity acquisition, aimed at mitigating exposure to global antitrust risks. Manus’s core value lies in its software, intellectual property, and accumulated data, rather than traditional assets.
2. Merger Control: Compulsory Filing and Call-in Powers
Under China’s Anti-Monopoly Law, if a cross-border transaction constitutes a concentration of undertakings with significant turnover in China, it must be notified to the State Administration for Market Regulation (SAMR).
Key questions include:
- Does the transaction constitute a concentration of undertakings? If Meta acquires control over Manus, it will be considered a concentration.
- Does the transaction meet filing thresholds? If the global turnover exceeds RMB 12 billion, or if combined turnover in China exceeds RMB 4 billion, notification to SAMR is required.
3. National Security Review: Possible Application of “Catch-all” Mechanisms
According to China’s National Security Law, foreign investments affecting national security must undergo a security review. If Manus’s restructuring avoids equity acquisition in Chinese entities, the application of the security review mechanism may face limitations.
However, broad provisions in the National Security Law allow reviews of technologies and data processing that may affect national security. This raises questions about any data collected during Manus’s operations in China.
4. Technology Export Controls: Ongoing Scrutiny
Technology export controls may represent a crucial regulatory entry point in the Meta/Manus transaction. The Regulations on the Administration of the Import and Export of Technology stipulate that technologies subject to restrictions cannot be exported without approval.
The restricted technologies catalogue includes numerous technologies relevant to AI firms. Regulatory authorities will assess whether Manus’s technologies fall under this catalogue and whether any unauthorized transfers occurred.
5. A Bellwether Deal: Charting China’s AI Regulatory Terrain
The Meta/Manus transaction serves as a bellwether for AI regulation in China. It highlights the complexities of antitrust review, national security considerations, and technology export controls. As a cross-border deal involving a global tech giant and an emerging AI company, it reflects the regulatory landscape facing Chinese technology companies in global expansion.
The implications of this deal extend beyond compliance, prompting discussions on technological sovereignty and the adaptability of regulatory frameworks to new transaction structures.
