Facebook-owner Meta’s acquisition of AI start-up Manus has been blocked by Chinese regulators.
Announced in late December, Meta said the deal – estimated to be worth around $2bn (£1.48bn) at the time – would see Manus’ agents used to boost to its own AI across its platforms.
But reports on Monday said Beijing’s National Development and Reform Commission had prohibited foreign investment in the deal, requiring “the parties involved to withdraw the acquisition transaction”.
A Meta spokesperson told the BBC “the transaction complied fully with applicable law”.
“We anticipate an appropriate resolution to the inquiry,” they added.
It comes after months of scrutiny over Meta’s acquisition of Manus by Chinese regulators.
Manus has sought to set itself apart from rival AI developers with what it claims can be a “truly autonomous” agent.
Unlike many chatbots which need to be repeatedly asked for things before a user can get their desired response, the company says its service can plan, execute and complete tasks independently in accordance with instructions.
Analysts described the deal at the time as a “natural fit” for Meta, with founder and chief executive Mark Zuckerberg spurring the firm’s AI development.
It recently told staff it would cut thousands of jobs amid increased AI spend.
Tech tensions
While Manus is now based in Singapore, it was founded and previously based in China and, as such, has come under the country’s regulators.
China has a number of strict laws and regulations around its tech, including controls on their export or sale to foreign firms.
Such regulations, for instance, meant Beijing’s approval was needed to secure President Donald Trump’s deal to keep TikTok available in the US after its sale by Chinese parent company ByteDance.
It was reported in March that Manus’ two co-founders had been prevented from leaving the country amid a review of Meta’s acquisition.
“The outstanding team at Manus is now deeply integrated into Meta, running, improving and growing the Manus service and will continue to make it available to the millions of people who enjoy it,” a Meta spokesperson told the BBC at the time.
Any requirement to unwind the acquisition may, as a result, cause difficulty for Meta.
It also comes amid tensions between the US and China, which have loomed large over the tech industry.
The White House said on Friday it would work more closely with US AI firms to combat “industrial-scale campaigns” to steal advances in the technology – saying new information showed “foreign entities, principally based in China” were copying US models.
A representative of China’s US embassy in Washington DC took issue with “the unjustified suppression of Chinese companies by the US” in response to the memo.
“China is not only the world’s factory but is also becoming the world’s innovation lab,” the representative added.
By BBC News
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