Meta Platforms Inc. is attempting to acquire Manus, a Singapore-based artificial intelligence startup originally founded in China, in a deal valued at $2 billion.
This proposed acquisition is currently under the examination of Beijing regulators, who are investigating possible violations related to export control laws. It remains uncertain whether they possess the authority to impede the transaction.
According to the Financial Times, Chinese authorities are assessing whether the acquisition contravenes national laws governing the export of critical technologies.
A significant point of contention is whether Manus should have obtained an export license prior to its relocation to Singapore last year.
Manus garnered attention last March for its innovative AI agent platform, capable of executing intricate tasks—including crafting resumes, developing software applications, and designing websites.
Following a $75 million funding round spearheaded by the U.S. venture capital firm Benchmark, the startup moved to Singapore last summer.
This announcement raised alarm bells, leading U.S. Senator John Cornyn to voice concerns on social media, subsequently prompting the Treasury Department to investigate whether Benchmark breached regulations limiting American investments in Chinese AI ventures.
As reported by the Wall Street Journal, Manus’s relocation was motivated by a desire to evade regulatory scrutiny, a trend now adopted by numerous other Chinese AI startups.
This phenomenon, referred to as “Singapore washing,” sees companies shifting their bases to escape geopolitical oversight. Reports suggest that China is discontented with this growing tendency.
Winston Ma, a professor at New York University School of Law and a partner at Dragon Capital, articulated to the Financial Times that the approval of Meta’s acquisition could incite more Chinese AI startups to emigrate, which might siphon talent out of the country.
Should Chinese regulators determine that Manus failed to acquire the necessary export license for its move to Singapore, the founders may face criminal charges, potentially jeopardizing the acquisition.
Historically, China has employed export control measures to safeguard vital technology companies. During the initial term of U.S. President Donald Trump, similar laws were invoked to attempt to ban TikTok.
Conversely, Chris McGuire, a senior fellow for China and emerging technologies at the Council on Foreign Relations, remarked to the Financial Times that Meta’s pursuit of Manus exemplifies how U.S. investment restrictions are inadvertently attracting top Chinese AI talent to defect to the United States in search of superior funding prospects. “The U.S. AI ecosystem is currently more attractive,” he noted.
While the outcome remains uncertain, it appears that China may face challenges in stalling Meta’s acquisition ambitions regarding Manus, suggesting that the path forward may be fraught with difficulties.
Source link: Siliconangle.com.
