Big blow to Meta from China: AI deal worth 2 billion dollars banned, called a big threat to national security

China Blocks Meta AI National Security: Amid the global race for Artificial Intelligence (AI), China has given a major strategic blow to American tech giant Meta. China’s regulatory authorities have banned AI startup ‘Manus’ The proposed $ 2 billion (about Rs 16,000 crore) deal to buy has been put on hold.

China cited ‘national security’ as the reason behind this decision. and ‘data sovereignty’ Have cited. This move shows how strict Beijing is now taking to prevent its sensitive technologies and talent from reaching foreign hands, especially American companies.

Reference to national security and investment rules

According to a report by Modern Diplomacy, China’s National Development and Reform Commission (NDRC) has taken this strict decision. The Commission has reviewed the ‘Foreign Investment Protection Rules’ Ordered to cancel this deal.

Chinese officials believe that this deal would have put not only important technical data but also the country’s best talent under foreign control. This decision makes it clear that China is now tightening its surveillance on cross-border technology deals.

Deep ties with China become a hindrance in the deal

The surprising thing is that ‘Manus’ one such artifical Intelligence (AI) is a company which received funding from American investors and later shifted its headquarters abroad. Despite this, China asserted its rights over it.

According to the report, Chinese officials took seriously the company’s inside links to talent, infrastructure and technological development in China. Beijing argues that no matter where the company is registered, if its technological development is related to Chinese soil, then it will come under the purview of Chinese rules. This message is a big warning for those tech companies that want to move out of China and expand globally.

The process of withdrawing the deal will be very complicated

After this decision, now ‘Meta’ and ‘Manus’ Will have to withdraw its deal completely. Experts believe that canceling a deal in a strategic area like AI is not an easy task. This includes reversal of share transactions, refund of huge sums of money and most importantly, return of intellectual property.

In a field like AI, the exchange of IP and data is complex enough that reverting it back to its original state could become a legal and technical headache for both companies.

Anxiety will increase among global investors

China This tough stance is sure to have an impact on the global investment environment. Now international investors will have to think a hundred times before investing in any startup related to China. Experts believe that the risks in cross-border deals will increase significantly in future, especially if the buyer is an American company.

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To avoid this, investors can now focus on dividing their operations, technology and Research and Development (R&D) among different countries, so that in future the entire global deal does not get affected due to strict rules of any one country.