The acquisition of China’s Manus AI by Meta made waves in the AI space, especially as CEO Mark Zuckerberg has been busy hiring top talent and resources to keep his company relevant in the AI race. However, the mega $2 billion acquisition of the AI startup by Zuckerberg’s global firm has drawn attention from the Chinese authorities, leading the company’s co-founders to be restricted to Chinese international borders until an investigation by the National Development and Reform Commission (NDRC) concludes.
Chinese authorities have imposed travel restrictions on Manus AI’s co-founders as regulators scrutinise the deal for potential violations of foreign investment and technology export rules.
The two co-founders, Xiao Hong and Ji Yichao, were summoned to Beijing earlier this month for a meeting with the NDRC, China’s powerful economic planning body. After the meeting, they were instructed not to leave the country while the review is ongoing.
The co-founders, however, remain free to travel domestically.
Manus, meanwhile, had shifted its headquarters to Singapore amid growing regulatory pressure in China. Despite its Chinese origins, the company restructured to facilitate the deal with the US tech giant Meta.
Meta-Manus deal under regulatory scanner
Chinese officials are reportedly examining whether the transaction involved improper “model washing” — a practice where Chinese-developed AI technologies are rebranded or relocated overseas to bypass domestic export controls and restrictions. Authorities are also investigating potential violations of foreign direct investment rules related to Manus’s Chinese entities and the transfer of strategic AI technology to a foreign company.
The deal, valued between $2 billion and $2.5 billion, was one of the largest acquisitions of a Chinese-origin AI firm by a US company in recent years. The acquisition highlights the intensifying global competition for advanced AI talent and technology, all while Beijing’s determination to maintain tight control over strategic technologies continues.
What does Meta, Manus say
As of now, Meta has not issued an official comment on the travel restrictions or the ongoing regulatory review. The founders also remain unavailable for public statements.
This development ahead of the acquisition process reflects China’s increasingly strict oversight of outbound tech deals and talent movement. In recent years, Beijing has tightened rules on the export of advanced AI models. It has also restricted key personnel from easily relocating abroad, especially in sensitive sectors.
It remains to be seen whether the complex geopolitical challenges surrounding cross-border AI acquisitions will eventually affect the deal.