China on Monday blocked US tech giant Meta from acquiring AI firm Manus.
China’s National Development and Reform Commission (NDRC) said in a one-line statement that it would “prohibit foreign investment in Manus in accordance with laws and regulations, and require the parties involved to withdraw the acquisition transaction.”
The announcement would force Meta to cancel its purchase of Manus, which was believed to have cost more than $2 billion (€1.7 billion).
Meta, which owns Facebook, Instagram and WhatsApp, said in a statement that its purchase of Manus “fully complies with applicable law.”
“We look forward to an appropriate resolution to the investigation,” the California-based company said.
What is Manus?
Manus made headlines last year after it announced the world’s first general AI agent – capable of various tasks like coding, conducting market research and preparing budgets.
Manus does not create its own AI models. Instead, its agent framework works on top of existing Western macro language models.
The company closed its China offices in July last year and moved its operations to Singapore, where its parent company was re-incorporated.
The move allowed Manus to avoid US restrictions on investing in Chinese AI firms, as well as Chinese regulations that limit AI startups’ ability to transfer IP and capital overseas.
Meta had announced in December that it would acquire Manus and said at the time that “there will be no continued Chinese ownership.”
China-US AI rivalry heats up
China has been trying to outdo US AI innovation in terms of both economic power and national security, with some success at times, such as when the launch of its indigenous DeepSeq model caused US stocks like Meta, Nvidia and Microsoft to fall before recovering some of the losses.
Meta’s decision to acquire Manus last year was a rare case of a US tech giant buying an AI firm with strong ties to China.
But Beijing’s decision to cancel the acquisition could also set a new precedent.
“China is showing the world it is willing to work hard when it comes to AI talent and capabilities, which the country sees as a key national security asset,” Lian Ze Su, chief analyst at technology research and advisory group Omdia, told The Associated Press.
“This is strongly indicative of what Chinese authorities may do next regarding acquisitions involving Chinese deep-tech companies.”
Edited by: Srinivas Majumdaru