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The Chinese government is blocking Meta's $2 billion acquisition of the autonomous AI agent startup Manus.
Meta CFO Susan Lee stated on an earnings call that the company is still working through the details of China's block on the Manus acquisition and has no update.
Investors and entrepreneurs believe the strategy of Chinese startups relocating to Singapore to appear international, known as 'Singapore washing', is no longer viable following China's intervention in the Manus deal.
Beijing is asserting jurisdiction over Manus under Chinese law, even though the company had relocated its headquarters to Singapore.
Two of the founders of Manus were reportedly asked to return to mainland China and are currently there.
The U.S. government, beginning under the Trump administration, started using the Committee on Foreign Investment in the U.S. (CFIUS) to restrict American investment into Chinese technology, a policy now known as 'reverse CFIUS'.
Current U.S. policy prohibits American institutional investors like pension funds from investing in Chinese companies involved in artificial intelligence and advanced semiconductors.
China's intervention in the Manus acquisition is consistent with its pattern of seeking greater control over its national tech champions, but is primarily driven by geopolitical conflict with the U.S. rather than domestic financial stability concerns.
The primary goal of Beijing's intervention in the Manus-Meta deal is to send a message to other Chinese entrepreneurs that the 'Singapore washing' strategy of relocating abroad for global expansion is not permissible.
The Chinese government's announcement to block the Meta-Manus acquisition came four months after the deal was initially announced.
Prior to its acquisition by Meta, AI startup Manus had relocated its headquarters from China to Singapore.
Most, if not all, of Manus's employees are believed to have relocated from mainland China to Singapore as part of the company's move.