Key Takeaways:
- Meta’s acquisition of Manus, a Singapore-based AI startup with Chinese roots, highlights the US-China tech rivalry and the importance of global talent flows.
- The deal signals a shift in AI’s center of gravity from chatbots to agents that can autonomously execute complex tasks.
- The acquisition has raised concerns about national security, geopolitics, and cybersecurity risks, particularly given the Chinese origins of Manus.
- The US needs to balance openness to acquiring Chinese companies with robust national security controls to safeguard its strategic interests.
- A transparent framework of pre- and post-acquisition security reviews, compliance obligations, and legal liabilities is necessary to mitigate risks.
Introduction to the Meta-Manus Deal
The acquisition of Manus, a Singapore-based AI startup with deep Chinese roots, by Meta Platforms in late December 2025, has significant implications for the US-China tech rivalry. The deal, valued between $2 billion and $3 billion, is Meta’s third-largest acquisition ever, and it highlights the importance of global talent flows in the development of artificial intelligence (AI). As Meta CEO Mark Zuckerberg wrote in an open letter, "Superintelligence will usher in a new era of personal empowerment—giving people greater agency to shape the world they want to build." The acquisition of Manus is a concrete step towards this vision, and it signals Meta’s intention to compete aggressively with OpenAI, Google, and Microsoft in the development of applied, agentic AI systems.
The Significance of the Acquisition
The acquisition of Manus is significant because it marks a shift in AI’s center of gravity from chatbots that talk to agents that can act. Manus specializes in "AI agents" capable of autonomously executing complex tasks, such as booking travel, coordinating workflows, and interacting with digital environments with minimal human supervision. This is the frontier that Meta believes will define the next era of "superintelligence." As Zuckerberg noted, "The next era of AI will be about agents that can act on our behalf, and that’s what we’re building with Manus." The acquisition of Manus is a bold move by Meta to acquire the talent and technology needed to compete in this new era of AI.
Reactions in China
The deal has triggered unprecedented attention inside China, largely because it broke three long-standing "rules" of how major tech acquisitions usually unfold. First, the speed of negotiations was astonishing, with the deal being completed in just over ten days. Second, the valuation of Manus defied conventional metrics, with Meta paying a premium over the company’s recent Series B valuation of $500 million. Third, the deal laid bare the global fate of Chinese entrepreneurial talent, with some media outlets labeling the acquisition a "defection" and arguing that China was losing one of its most promising AI teams to an American tech giant. As one Chinese media outlet noted, "The acquisition of Manus is a wake-up call for China’s tech industry, highlighting the need for more investment in AI research and development."
The Global Fate of Chinese Entrepreneurial Talent
The financing history of Manus’s parent company, Butterfly Effect, reads like a contemporary tech parable. The company was founded by Chinese entrepreneurs and initially funded by Chinese investors, including ZhenFund and Tencent. However, the inflection point came when dollar capital entered the picture, with Silicon Valley stalwart Benchmark Capital leading the Series B round and catapulting the valuation to nearly $500 million. The arc—from Chinese incubation to American acquisition—has become increasingly common, and increasingly controversial. As Dr. Jianli Yang, a research fellow at the Kennedy School of Government at Harvard University, noted, "The Meta-Manus deal highlights the tension between the need for global talent flows and the need for national security controls."
National Security Concerns
The deal has also generated controversy and pushback in the United States, with concerns revolving around geopolitics, national security, and cybersecurity risks inherent to AI agents—especially those with Chinese origins. Some experts warn that the transaction could intersect with Beijing’s technology export control regime, depending on whether restricted AI technologies were developed in China and transferred overseas without proper authorization. Others raise concerns reminiscent of the TikTok debate: could the Chinese government, directly or indirectly, gain access to sensitive data or influence the platform? As Senator John Cornyn noted, "The acquisition of Manus raises important questions about the national security implications of US investments in Chinese companies."
Mitigating Risks
Meta has taken extensive mitigation measures to address these concerns. All Chinese investors have been fully bought out, eliminating ongoing Chinese ownership. Manus will shut down its China-facing products and operations. Employees in China will either be relocated or fully cut off from sensitive systems. AI models will remain geofenced, and the staff joining Meta will not have access to customer data. However, skepticism persists, and the US needs to balance openness to acquiring Chinese companies with robust national security controls to safeguard its strategic interests. As Dr. Yang noted, "The US needs to develop a transparent framework of pre- and post-acquisition security reviews, compliance obligations, and legal liabilities to mitigate the risks associated with acquiring Chinese companies."
The Way Forward
The Meta-Manus deal has exposed the tensions inherent in balancing openness with vigilance in the era of AI. The US needs to pursue a policy of "opening doors while maintaining robust national security control." This approach matters far beyond AI software, as industries such as solar energy, batteries, and robotics are locked in hyper-competition in China, and many companies are seeking American buyers, partners, or joint ventures. The US can absorb global talent and innovation while safeguarding its strategic interests, but it requires a nuanced approach that balances the need for openness with the need for national security controls. As Dr. Yang concluded, "The US can combine openness with vigilance, and leadership will belong to those who can navigate this balance wisely."
https://nationalinterest.org/blog/techland/how-metas-acquisition-of-manus-shows-a-new-national-security-formula