China is probing an acquisition of an artificial intelligence (AI) platform based in Singapore with Chinese origins from Meta.
On Thursday (Dec. 8), China’s commerce ministry said it will review the deal to determine whether it violates export controls or foreign investment rules.
Meta wants to buy Manus and use it to boost AI on Facebook and Instagram.
Manus is a smart AI assistant that can handle complicated tasks on its own by searching the internet and using different tools. A special feature of Manus is it combines advanced AI with automated systems to carry out actions step by step. It shows users exactly what it is doing in real time through a virtual workspace, making the whole process easy to follow.
Manus introduced a product called AI Agents capable of managing a person’s financial and travel plans.
The company shares data with Chinese tech giant Alibaba.
Those connections are raising red flags among national security experts in the U.S.
“This should never have been approved,” Casey Fleming, a Chinese analyst in National Security Advisor said. “I would absolutely hope that the Trump administration bans it.”
“Don’t forget, we’ve got U.S. military, we’ve got government people, we’ve got people of top secret clearance. All these people, you know, every time you put an app on your phone, and especially an app that’s been married to a Chinese AI app, a communist Chinese AI app, you’re weakening our national security and the safety of our military and our support people as well.
“And that’s not just the military, it’s government, it’s business, it’s everything,” Fleming added.
Meta claims China will no longer play a role in Manus’ daily operations.
Manus relocated from China to Singapore in June last year.
The relocation to Singapore is to allow Manus to have better access to US markets and computing resources such as AI chips, which it otherwise will not have due to U.S. restrictions on Chinese AI companies.
“There are two main reasons for Manus’ fast relocation: at the moment, it is difficult to secure strong funding in China; also, the underlying technology of the LLMs [large language models] it uses is still reliant on American AI companies,” according to ThinkChina in August last year.
It also reported that Manus’ ability to secure US investment of US$75 million led by Silicon Valley venture capital firm Benchmark as the company is not a priority for Chinese investors given it is easier to catch up with compared with chips and LLMs. The investment drew regulatory scrutiny, which eventually forced the company to relocate to Singapore.
Analysts say Manus could still be influenced by China through investors, technology or business partnerships in Singapore.
They say the company’s reliance on Chinese markets gives Beijing leverage over the company’s decisions, posing a potential U.S. national security risk.
U.S. Raises Question of Transhipment of AI Chips to China Via Singapore
The US said that DeepSeek and other Chinese firms gain access to restricted chips through companies in intermediary countries including Singapore that do not face the same export control restrictions as China. These intermediary companies purchase the restricted chips and transship them to China.
The US views Beijing obtaining advanced AI chips for the production of advanced military weapons as a national security risk. Since 2022, the US has started to impose export controls of semiconductor chips to China.
The report by the Selection Committee raised the question of China arranging the diversion of these restricted chips to another country, citing the case of Singapore’s alleged transhipment of Nvidia’s chip. Nvidia’s sales to Singapore accounted for less than 5% while sales to China accounted for 25% in January 2021. The trend reversed after the US imposed export controls, with the proportion of sales to Singapore steadily increasing to more than 20% in the fourth quarter of 2024, surpassing sales to China, while actual chip shipments to Singapore remain below 2%.
The report also stated that Singaporean authorities charged three individuals, including one Chinese national, in connection with the illegal export of advanced Nvidia chips to DeepSeek in China, in violation of US export controls. It also reported that Singaporean law enforcement raided 22 locations and arrested at least nine individuals involved in the illicit network, with these arrests occurring immediately after the Chairman of the Select Committee John Moolenaar and Ranking Member Raja Krishnamoorthi sent a letter in January highlighting the threat of chip smuggling via Singapore.
Singapore’s Ministry of Trade and Industry (MTI) responded in a letter dated February 1 that “Singapore is an international business hub” and “major US and European companies have significant operations here”, adding “Nvidia has explained that many of these customers use their business entities in Singapore to purchase chips for products destined for the US and other Western countries”.
Moreover, MTI said in the letter that “Nvidia has also stated that there is no reason to believe that DeepSeek obtained any export-controlled products from Singapore” and that it expects “US companies, like Nvidia, to comply with US export controls and our domestic legislation”.
MTI added, “Our customs and law enforcement agencies will continue to work closely with their US counterparts.”
Some of the Select Committee recommendations include export controls in semiconductor manufacturing equipment that can be used to produce such chips, scrutiny of chip exports to jurisdictions with a high risk of transshipment to China, such as Singapore, and requiring companies located in high transshipment risk countries to install on-chip location verification capabilities in order to receive an export licence.
