China is sending a strong signal to U.S. tech companies: hands off its artificial intelligence (AI) talent and technology. Beijing’s message became clear with its announcement of a probe into Meta’s acquisition of Manus, a Chinese AI startup, analysts reported to Business Insider.
The Investigation: What’s at Stake?
The investigation, confirmed by China’s Ministry of Commerce in a Thursday press conference, aims to determine whether Meta’s acquisition of Manus complies with China’s laws and export control regulations. According to a statement translated by Google, the probe is focused on ensuring that sensitive technology or knowledge is not unfairly taken out of China.
Manus was launched in China in March 2025 by the AI product studio Butterfly Effect. The company garnered global attention after claiming to develop a “general-purpose” AI agent that can perform tasks with minimal human input. However, Manus moved its base to Singapore in mid-2025. In December, Meta announced it would acquire Manus in a deal worth more than $2 billion, severing Manus’s ties with China completely.
While Meta did not respond to Business Insider’s request for comment, analysts argue that China’s probe is aimed at preventing the trend of “Singapore washing” — when companies move from China to Singapore to avoid regulatory scrutiny. High-profile companies such as ByteDance (parent company of TikTok) and fast-fashion brand Shein have already moved their headquarters from China to Singapore.
A Strategy to Protect AI Talent and Technology
This investigation is seen as a move to deter Chinese AI startups from moving abroad, especially to the U.S., where companies are eager to acquire top AI talent. Wendy Chang, a senior analyst at the Mercator Institute for China Studies, told Business Insider that Beijing’s probe is an effort to protect its AI technology and talent from being acquired by foreign companies, particularly in the U.S.
Meta plans to bring Manus’s top leadership on board and continue operating Manus’ AI platform separately, while integrating the technology into its own products. This move, analysts say, illustrates how the battleground in the tech rivalry between China and the U.S. has expanded beyond semiconductors to include AI models, agents, talent, and enterprise deployment.
The New Battleground: AI Talent and Models
For years, the U.S. and China have engaged in a tit-for-tat battle over tech regulations, particularly focusing on advanced semiconductors. U.S. export controls on chips, like those affecting Nvidia, have been a major point of contention. However, the Manus investigation signals a shift in the tech competition — the real battleground is now AI talent and intellectual property.
As companies like OpenAI, Meta, and Google compete for top AI experts, attracting and retaining talent has become crucial to their success. In 2025, Meta made a significant investment of $14 billion in AI training startup Scale AI and brought in its CEO, Alexandr Wang, to spearhead the company’s AI initiatives. The Manus probe highlights China’s concern over the growing outflow of AI expertise and technology to foreign companies.
Murthy Grandhi, a company profiles analyst at GlobalData, noted that the Manus investigation reflects a shift from a focus on physical tech (like chips) to digital assets such as AI models, agents, and talent. China’s scrutiny could signal a more rigorous approach to policing the transfer of AI technology and intellectual property (IP) out of the country. Grandhi warned that this could accelerate the “bifurcation of AI ecosystems,” where the U.S. and China develop separate, competing AI infrastructures.
The Future of AI Ecosystems
The diverging approaches of the U.S. and China toward AI are becoming increasingly evident. Chinese companies tend to favor more open AI models, like DeepSeek, while U.S. firms are more focused on creating proprietary models. China’s investigation into Meta’s acquisition could set a precedent for the regulation of outbound AI technology transfers.
It remains unclear how long the probe will last if it escalates into a full investigation. Previous investigations by China’s Ministry of Commerce have taken over a year. However, analysts like Grandhi predict that the deal will likely be approved with constraints, rather than blocked entirely. Regardless of the final decision, the investigation sends a strong message to other U.S. and foreign companies contemplating similar acquisitions in China.
Frequently Asked Questions (FAQ):
1. Why is China investigating Meta’s acquisition of Manus?
China is investigating whether the acquisition violates export control laws and regulations, aiming to prevent the outflow of AI technology and talent to foreign companies, particularly in the U.S.
2. What is “Singapore washing”?
“Singapore washing” refers to companies relocating their operations from China to Singapore to avoid strict Chinese regulations, while still benefiting from Chinese technology and talent.
3. What is the significance of AI talent in the global tech race?
AI talent has become a critical resource, and companies in the U.S. and China are competing fiercely to attract top experts. The movement of AI talent and technology is now a key focus in the global tech rivalry.
4. What could be the outcome of the investigation?
While it’s not clear how long the probe will last, analysts predict that the deal may be approved with some restrictions. Regardless of the outcome, the investigation sends a strong signal to other companies considering similar acquisitions.
5. Why is the U.S. and China rivalry shifting from chips to AI?
The focus is shifting because AI models, agents, and talent have become the new frontlines in the tech competition, especially with the increasing importance of AI for future technological and economic dominance.
