Chinese regulators have restricted two top executives from artificial intelligence startup Manus from leaving the country as part of an ongoing review into its acquisition by Meta Platforms. The development, first reported by the Financial Times, highlights Beijing’s increasingly firm approach toward foreign involvement in sensitive technology sectors.
The move reflects broader concerns within China about how advanced technologies—particularly artificial intelligence—are transferred, controlled, and potentially leveraged by foreign companies. With AI now seen as a critical area tied to both economic competitiveness and national security, authorities are carefully examining deals that involve overseas buyers.
Senior Leadership Called in for Questioning
The executives affected are Manus co-founder and chief executive Xiao Hong and co-founder and chief scientist Ji Yichao. Both were summoned earlier this month to attend a meeting in Beijing with officials from the National Development and Reform Commission (NDRC), one of the country’s most influential economic regulatory bodies.
Sources familiar with the matter indicated that the meeting focused on the details of Meta’s acquisition of Manus, with regulators seeking clarity on whether the deal adhered to China’s laws governing foreign investment and cross-border technology transfers.
Following the meeting, the two executives were informed that they would not be allowed to leave China while the review process continues. However, the restrictions do not amount to formal detention, and both individuals remain free to move within the country.
Deal Faces Scrutiny Over Legal and Strategic Concerns
At the heart of the investigation is whether the acquisition violates any domestic regulations or raises concerns related to China’s strategic interests. Authorities are particularly cautious when it comes to transactions involving emerging technologies, where intellectual property and data could have long-term implications.
Earlier signals from China’s commerce authorities suggested that the deal would undergo detailed examination. Officials have repeatedly stated that acquisitions involving advanced technologies—especially those linked to artificial intelligence—would be reviewed to ensure compliance with national laws and broader policy goals.
Although regulators have not publicly accused Manus or Meta of wrongdoing, the decision to impose travel restrictions on the company’s leadership indicates that the review is being treated with seriousness.
Manus Turns to Legal Experts
As regulatory pressure mounts, Manus is reportedly seeking help from legal advisors and consulting firms to manage the situation. The company is working to respond to regulatory queries and demonstrate that its operations and the acquisition process comply with applicable rules.
Neither Manus nor China’s Ministry of Public Security has issued a detailed public response so far. In China, it is not uncommon for such investigations to proceed quietly, with limited official communication until conclusions are reached.
This lack of transparency has left industry observers speculating about the potential outcomes and timelines for the review.
Meta Maintains Deal Was Lawful
Meta has defended its acquisition, stating that it followed all relevant legal procedures. The company has expressed confidence that the matter will be resolved without major complications.
The deal, announced in December, represents a significant step in Meta’s efforts to expand its artificial intelligence capabilities. Manus is known for building general-purpose AI systems designed to function like digital workers, capable of handling tasks such as research, analysis, and automation with minimal human guidance.
Such technologies are becoming increasingly valuable as companies look to integrate AI into everyday business operations, boosting efficiency and reducing reliance on manual processes.
High-Value Transaction Draws Attention
While official financial details were not disclosed, the acquisition is believed to have valued Manus at between $2 billion and $3 billion. The scale of the deal alone makes it notable, but its focus on AI technology has amplified regulatory interest.
Globally, large technology firms are competing aggressively to secure AI talent and innovation. This competition has driven up valuations for startups like Manus, while also attracting closer scrutiny from governments wary of losing control over critical technologies.
China, in particular, has been vigilant about ensuring that key innovations developed within its borders are not transferred abroad without oversight.
Growing Regulatory Tightening in China’s Tech Sector
The review of the Meta-Manus deal fits into a broader pattern of increased regulation across China’s technology landscape. In recent years, authorities have introduced stricter rules covering data protection, overseas listings, and foreign investment.
Artificial intelligence has emerged as a top priority area, with the government emphasizing the need to maintain control over its development and deployment. Policies have been designed to prevent sensitive data from being accessed by foreign entities and to ensure that domestic companies remain competitive in the global race.
As a result, cross-border acquisitions involving AI firms are likely to face detailed and prolonged reviews.
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