U.S. big tech Meta's planned $2 billion (about 3 trillion won) acquisition of China-linked artificial intelligence (AI) startup Manus was snapped up by China's Tencent. With the Chinese government blocking the move on national security grounds out of concern that a U.S. company would absorb advanced technology, it put forward a domestic tech giant to defend control.
On the 10th, the Financial Times (FT) reported that Tencent is negotiating to buy Manus equity to become the largest shareholder. Earlier, Meta acquired Manus for $2 billion in Dec. last year and began integration. But China's National Development and Reform Commission (NDRC) ordered Meta to nullify the acquisition, citing technology leakage and national security. In response, Tencent, together with existing investors ZhenFund and HSG, decided to buy back Manus at the same $2 billion valuation Meta had agreed to. Existing U.S. investors, including U.S. venture capital Benchmark, are expected to be left out of this transaction.
This transaction is seen as a decisive scene that shows the fierce power struggle between the United States and China over global AI leadership. Manus is a corporations that has stood out with autonomous AI agent technology that independently performs complex tasks without human help. Right after the acquisition, Meta quickly moved Manus staff to Singapore to absorb the technology. But after Chinese authorities took the unprecedented step of nullifying the acquisition, Meta carried out a painful separation, including completely cutting off access to Manus's internal systems and pulling out staff.
Experts say the case signals a new barrier has been erected in the cross-border technology M&A market. Han Xian Lin, China lead at the U.S. consulting corporations Asia Group, said, "The Chinese government has drawn a clear red line that Chinese AI talent and technology can never be sold to U.S. corporations." Matthias Hendricks, a global AI corporations adviser, also noted, "Chinese-linked AI now faces an unavoidable 'rollback risk,' no matter how clever the transaction structure."
The U.S.-China locking of AI technology is expected to intensify further. The U.S. Commerce Department is tightening export controls on advanced AI models aimed at China. China, for its part, is placing a firewall to block core technology from flowing to the United States. As the two countries' conflict over securing advanced technology reaches an extreme, significant constraints are expected even on moves by big tech corporations to acquire promising startups to narrow the technology gap.