Meta's $2 billion acquisition of AI assistant platform Manus is facing regulatory scrutiny, creating a transatlantic divide between Washington and Beijing. While U.S. regulators seem satisfied with the deal's legitimacy, Chinese authorities are reportedly raising concerns, according to the Financial Times.

The acquisition price tag of $2 billion underscores Meta's commitment to bolstering its AI capabilities. However, the deal's path hasn't been smooth. Earlier this year, Benchmark's investment in Manus triggered immediate controversy, with U.S. Senator John Cornyn voicing his concerns on X. This investment also prompted inquiries from the U.S. Treasury Department regarding new regulations restricting American investment in Chinese AI companies.

The initial U.S. concerns stemmed from the potential transfer of sensitive AI technology to China. Manus's subsequent relocation from Beijing to Singapore was seen as a strategic move to mitigate these concerns and disentangle itself from Chinese influence. This relocation highlights the increasing geopolitical complexities surrounding AI technology and investment flows.

Now, the regulatory landscape has shifted. Chinese officials are reportedly reviewing whether the Meta deal violates technology export controls. This review could provide Beijing with leverage it initially lacked, potentially impacting the deal's finalization and Meta's access to Manus's technology. Specifically, they are examining whether Manus needed an export license when it relocated its technology.

The outcome of the Chinese regulatory review remains uncertain. However, it underscores the growing importance of technology export controls and the potential for international regulatory conflicts to impact major tech acquisitions. This situation highlights the need for companies like Meta to navigate a complex web of international regulations when pursuing AI-related acquisitions, particularly those involving companies with ties to China. The case also serves as a reminder that seemingly straightforward business deals can become entangled in broader geopolitical considerations, potentially impacting future investments and technology transfers in the AI sector.