HONG KONG – On Thursday, China announced that it intends to evaluate and scrutinize Meta’s recent purchase of the AI startup Manus, underscoring the ongoing tech competition with the United States.

Meta, the company behind social media giants Facebook and Instagram, revealed its acquisition of Manus last week. Manus, although based in Singapore, has connections to China, and this acquisition marks an unusual move by a U.S. tech firm into a Chinese-rooted AI enterprise, especially amidst the tense relations between Washington and Beijing.

On Thursday, He Yadong, a spokesperson for China’s Commerce Ministry, informed the press that the ministry, along with other relevant bodies, would investigate whether Meta’s acquisition of Manus aligns with China’s legal framework.

He emphasized that any company involved in outbound investments, technology transfers, data sharing, or cross-border mergers and acquisitions must adhere to the regulations set forth by Chinese law.

Any enterprises engaging in outward investment, technology export, data transfer and cross-border mergers and acquisitions must comply with Chinese laws, He said.

Meta and Manus did not immediately reply to requests for comment.

“Security has become the top concern for Chinese policymakers,” said Gary Ng, a senior economist for Asia Pacific at investment bank Natixis. “Any tech transfer that could give the U.S. an edge in competitiveness will be heavily scrutinized.”

While the company behind Manus is Singapore-based Butterfly Effect Pte, its roots can be traced back to Beijing-registered entities which were founded in China a few years ago.

Meta said last week there would be “no continuing Chinese ownership interests in Manus AI” following the acquisition, and that Manus would discontinue its services and operations in China. Meta’s platforms including Facebook and Instagram are still banned in China under the country’s “Great Firewall”.

Manus said it would continue to operate in Singapore, where most of its employees are now based.

Cui Fan, a professor at the University of International Business and Economics in Beijing, raised questions in a public post on the Chinese social media site WeChat over the acquisition’s compliance with Chinese laws and technology export controls.

“A key question is whether any technologies prohibited or restricted from export under Chinese laws and regulations are exported without a license,” he wrote.

The “general-purpose” AI agent released by Manus last year can autonomously perform multi-step complex work such as breaking down tasks into smaller steps. It can be used for free but also offers paid subscription packages.

Last month, Manus said its annual recurring revenue had reached more than $100 million.

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Associated Press researcher Shihuan Chen in Beijing contributed to this report.