China’s Regulatory Toolkit for Meta’s Acquisition of Manus: Merger Control, National Security Review, and Technology Export Control

On 29 December 2025, global technology giant Meta announced a multi-billion-dollar acquisition of Manus, an artificial intelligence start-up with Chinese roots.¹ According to multiple news reports, Manus had previously completed a series of “offshore restructuring” steps at both the organizational and operational levels, including relocating its headquarters to Singapore, adjusting its shareholding structure, and ceasing the provision of services in China. These moves have rendered what would otherwise be a typical cross-border technology acquisition structurally more complex.

Cross-border commercial transactions are subject to legal oversight across multiple jurisdictions, most notably antitrust review (also referred to as merger control or the review of concentrations of undertakings) and national security review (also known as foreign direct investment review, or CFIUS review in the United States). In the artificial intelligence sector, regulatory scrutiny often extends beyond traditional metrics such as market share to encompass the cross-border flow and control of algorithmic models, training data, key talent, and computing resources.

Against this backdrop, what regulatory tools might China deploy to scrutinize Meta’s acquisition of Manus? This article seeks to examine the key regulatory issues implicated by the transaction within the framework of China’s existing legal and regulatory regime.

1. Background: Transaction Structure and Target Assets

Based on publicly available information², Manus originated as an artificial intelligence project incubated by Beijing Butterfly Effect Technology Co., Ltd., a Chinese company founded in 2022. Its early-stage research and development activities, as well as its core team, were primarily formed within mainland China, with the product positioned as a “general-purpose AI agent”.

Manus was launched in March 2024 and quickly attracted widespread attention for its advanced performance in handling complex problems. Subsequently, to mitigate potential risks associated with CIFUS review, Manus carried out an offshore restructuring in July 2025. As part of that process, the group relocated its headquarters and core operating entities to Singapore and gradually ceased providing products and services within mainland China.

At present, no publicly available information clearly sets out the specific structure of the transaction. Media reports suggest that the deal may not take the form of a traditional equity acquisition but is more likely to adopt an “acquihire” model — a talent-focused transaction structure increasingly used by Silicon Valley companies in the semiconductor and artificial intelligence sectors to mitigate exposure to global antitrust review risks.³

Manus’s core value lies primarily in the software code and system architecture of its agent system, related intellectual property and trade secrets, data assets accumulated during task execution and system operation, and the organizational capabilities embodied in its core engineering and product teams, rather than in traditional tangible assets. Meta has stated that it plans to integrate Manus’s services into its consumer- and enterprise-facing products, including Meta AI.

2. Merger Control: Compulsory Filing Supplemented by Call-in Power

Under China’s Anti-Monopoly Law and the country’s merger control practice, where a cross-border transaction constitutes a concentration of undertakings and the undertakings involved generate turnover within mainland China that meets the statutory filing thresholds, the transaction must be notified in advance to the State Administration for Market Regulation (“SAMR”) for merger review. For transactions that fall below the filing thresholds but have, or may have, the effect of eliminating or restricting competition, SAMR may still require the parties to submit a notification by issuing a written notice.

With respect to the Meta/Manus transaction, the following issues are particularly relevant.

A. Whether the transaction constitutes a concentration of undertakings

Under China’s Anti-Monopoly Law, a concentration of undertakings may arise in three circumstances: a merger between undertakings; an undertaking acquiring control over another undertaking through the acquisition of equity or assets; or an undertaking acquiring control over, or exercising decisive influence on, another undertaking through contractual arrangements or other means.

In this case, if Meta were to acquire control over Manus or its parent company through an equity acquisition, the transaction would constitute a concentration of undertakings. Even where the transaction structure does not involve equity control, it may still be regarded as a concentration if Meta, through an “acquihire” or other arrangements, obtains substantive control over Manus or its parent company in key aspects such as personnel, technology or data.

B. Whether the transaction meets the filing thresholds

According to the Provisions of the State Council on Thresholds for Prior Filing of Concentrations of Undertakings (2024), a proposed concentration must be notified to SAMR if it meets either of the following thresholds:

1. the combined global turnover of all undertakings participating in the concentration exceeded RMB 12 billion in the preceding fiscal year, and at least two of those undertakings each generated turnover of more than RMB 800 million within mainland China; or
2. the combined turnover of all undertakings participating in the concentration within mainland China exceeded RMB 4 billion in the preceding fiscal year, and at least two of those undertakings each generated turnover of more than RMB 800 million within mainland China.

If the transaction constitutes a concentration of undertakings, the undertakings participating in the concentration would be the acquiring party, Meta, and the target, Manus. Based on publicly available information, Meta reported global revenues of approximately USD 160 billion in 2024, with revenues of USD 18.35 billion generated within mainland China⁴, figures that far exceed the applicable turnover thresholds.

As for Manus, media reports in early 2024 indicated that its annualized revenue had reached approximately USD 125 million. However, given that Manus remains at an early stage of commercialization and has already ceased providing services to users in China, its turnover within mainland China may not have reached the RMB 800 million threshold.

Notwithstanding this, where there is evidence indicating that a transaction has, or may have, the effect of eliminating or restricting competition, the antitrust authority may proactively review transactions that fall below the filing thresholds by exercising its “call-in” power.

As an internationally recognized regulatory mechanism governing merger transactions, antitrust review often plays a decisive role in determining the outcome of commercial deals. As a cross-border transaction involving a global technology giant and an emerging artificial intelligence company, the Meta/Manus transaction presents a degree of complexity and uncertainty in terms of transaction structure, integration methods, and potential competitive effects. Where regulators adopt an approach centered on substantive control or potential competitive impact, the transaction could be brought within the scope of merger control review, and that the parties may be obliged to file.

3. National Security Review: Possible Application of “Catch-all” Mechanisms

Under Article 2 of the Measures for the Security Review of Foreign Investment (the “Security Review Measures”) jointly issued by China’s National Development and Reform Commission and the Ministry of Commerce, a foreign investment security review is triggered where a foreign investment activity “affects or may affect national security.” Such review is limited to foreign investors’ direct or indirect investments within mainland China, including, among others, the establishment of new enterprises and the acquisition of equity or assets of domestic enterprises. Transactions falling within this scope must be submitted for national security review and may not proceed without approval.

Given that Manus completed an offshore restructuring in July 2025, if the present transaction does not, in form, involve the acquisition of equity or assets of any entity incorporated in mainland China, the direct application of the foreign investment security review mechanism may face technical constraints. However, Article 59 of China’s National Security Law and Article 24 of China’s Data Security Law establish broader “catch-all” mechanisms for national security and data security review. These provisions allow China’s authorities to initiate reviews of specific items, key technologies, and data processing activities that affect or may affect national security.

Against the backdrop of Manus’s development history, several fact patterns with practical relevance may be envisaged. For instance, during its early-stage research and product testing phase, Manus may have provided services to users in China and collected or processed a certain volume of user interaction and usage data. Whether such data constitutes “important data” or involves a large amount of personal information, and whether any cross-border transfer of such data occurred during the offshore restructuring or subsequent technical integration associated with the transaction, could in principle fall within the compliance scrutiny of the Data Security Law and the Personal Information Protection Law.

Similarly, questions may arise as to whether, during model training, agent optimization and system iteration, Manus made use of data resources or application scenarios originating in China, and whether relevant datasets, parameter weights or accumulated engineering experience were transferred overseas together with the team and technical systems. Such circumstances could give rise to compliance discussions concerning cross-border data transfers and the substantive transfer of technological capabilities.

Accordingly, under the current legal framework and past regulatory practice, whether the Meta/Manus transaction will ultimately trigger a national security or data security review in China remains to be seen. Nevertheless, given the general-purpose nature of the artificial intelligence technologies involved and the potential for cross-border transfers of important data or personal information during the transaction and restructuring, the possibility of a national security review cannot be ruled out.

4. Technology Export Controls: Ongoing Scrutiny with Potential Liability

Under China’s current legal framework, technology export controls may represent one of the most practically operable regulatory entry points in the Meta/Manus transaction. The Regulations on the Administration of the Import and Export of Technology (2020) provide that technologies prohibited from export may not be exported, while technologies subject to export restrictions are administered under a licensing regime and may not be exported without prior approval.

The restricted technologies catalogue in the Catalogue of Technologies Prohibited or Restricted from Export (as revised on 15 July 2025) (“the Catalogue”)contains multiple technologies and control points that are closely related to artificial intelligence enterprises. According to expert commentary, regulatory authorities may need to assess whether the technologies possessed by Manus fall within the scope of restricted technologies listed in the Catalogue, and whether, when and by what means such technologies have been transferred overseas. If it is confirmed that restricted technologies were exported without the required license, the relevant entities may be subject to legal liability⁵.

Unlike antitrust review or foreign investment security review, technology export controls do not hinge solely on whether a transaction takes the form of an equity acquisition or involves the acquisition of a domestic Chinese enterprise. The core question instead is whether technologies developed within mainland China and falling within the scope of export control have been provided to overseas parties in any form without the requisite authorization. In the artificial intelligence context, algorithmic models, system architectures, training methodologies, and related engineering solutions have all become key areas of regulatory focus under China’s technology export control regime.

It is against this institutional backdrop that multiple Chinese and international media outlets have reported that China’s Ministry of Commerce has been paying close attention to, or has initiated scrutiny of, arrangements related to Meta’s acquisition of Manus from a technology export control perspective. Such scrutiny reportedly centers on whether the relevant technologies are subject to export controls and whether any unauthorized transfer of controlled technologies overseas has occurred.⁶

5. A Bellwether Deal: Charting China’s AI Regulatory Terrain

The Meta/Manus transaction has emerged as an important bellwether for China’s regulation of artificial intelligence technologies. Across the three regulatory pathways of antitrust review, national and data security review, and technology export controls, the transaction has triggered distinct layers of institutional debate and potential enforcement. Beyond the compliance assessment of a single deal, the case also reflects the broader regulatory environment and strategic choices confronting Chinese technology companies in the course of global expansion, while prompting further reflection on the protection of technological sovereignty, the prevention of the outflow of critical technologies, and the adaptability of existing regulatory frameworks to novel transaction structures.

Notes:

1. https://www.facebook.com/business/news/manus-joins-meta-accelerating-ai-innovation-for-businesses
2. The content herein is compiled from publicly available sources. The authors do not guarantee the accuracy or completeness of this information.
3. https://t.cj.sina.com.cn/articles/view/1239789860/49e5b12400101bcie
4. https://www.sec.gov/Archives/edgar/data/1326801/000132680125000017/meta-20241231.htm
5. https://mp.weixin.qq.com/s/OFsl7axb5xmJpyHTpPHUpA
6. https://www.ft.com/content/62f8f2c5-95c7-4437-b0f1-b8ecd507c330