Meta just acquired a Chinese-founded AI startup for $2B. Here's why that matters

A pet of the unreal intelligence service startup shot was simply acquired by Meta — capping off a year of intense competition between U.S. Tech giants vying for dominance of the world's most coveted technology.

Manus, a Singapore-based, Chinese-founded firm that specializes in agentic AI for small and medium-sized businesses, said on Monday that it will join Mark Zuckerberg's Meta, the parent company of Facebook, Instagram and WhatsApp.

Distinct from AI chatbots like ChatGPT and Deepseek, both of which require user prompts to execute tasks, Manus claims that its product can make decisions and complete tasks on its own, with far less prompting than its competitors.

And — unlike much of the industry — it actually makes money, having turned a profit by selling its product through subscriptions.

The goal of the acquisition is to give Meta's existing platforms "a bit of a brain transplant," explained Carmi Levy, a technology analyst based in London, Ont.

Manus's tech could improve Meta's agentic capabilities — like answering questions or completing tasks — keeping users on its platforms for longer stretches so that Meta, as Levy put it, "can make more money off of them."

The company will reportedly be sold for $2 billion US, a relatively inexpensive purchase in proportion to the dividends it could pay for its new owner, which has been on an AI buying spree this year as it competes with major players like OpenAI and Google.

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Now largely seen as a legacy technology company, California-based Meta has been "scrambling to pivot, to rebuild their businesses for this new AI age," said Levy.

"Developing a lot of that technology in-house has proven to be difficult because that's not what their culture was built around," he explained. Instead, the tech giant is buying up smaller firms and incorporating emerging technology into their core operations "as quickly as possible."

Back in June, Meta bought data company Scale AI for upwards of $14 billion US and brought its CEO on board to help launch a "superintelligence" unit that will focus on the company's in-house AI models, including Llama, its open-source large language model.

Meta has pumped money into superintelligence and on ad tech for merchants, and it's now trying to compel consumers to use artificial intelligence through its most popular platforms, Gil Luria, a stock analyst at U.S. Investment banking firm D.A. Davidson, told CNBC this week.

"One of the things they saw in Manus was it was being incorporated into [Chinese messaging app] WeChat, which is really a model for what they want to do with WhatsApp. It's this tool that allows you to do everything — it's PayPal, it's chat, it's payments, it's everything," said Luria.

"So by taking Manus and putting it there, Mark Zuckerberg is going to give us the companion that he's dreaming about — this friend-slash-assistant that helps us do stuff," he said. This could make the app more monetization-friendly than it currently is, according to Luria.

Facebook's co-founder wants Meta to be competitive in AI technology that is geared toward consumers, "where he's fighting not just OpenAI with ChatGPT, but also Google with their distribution through search, through YouTube, through all their other properties," said Luria.

The deal will first need to get by U.S. Regulators, who have been heavily scrutinizing Chinese-owned firms over purported national security concerns.

The most famous precedent is the conflict between the U.S. Government and the Beijing-based social media app TikTok, a years-long saga that recently ended with parent company ByteDance selling off its U.S. Business to a group of American investors.

As with TikTok, the Meta-Manus deal will likely "give pause to those who are concerned about the Chinese government's access to data that is collected by these apps, by these platforms, and what is done with that information," said Levy.

Some of that tension was on display when another U.S. Company invested in Manus — owned by Beijing-based company Butterfly Effect — earlier this year. Venture capital firm Benchmark led a $75 million US funding round in Manus back in April, and was criticized by some in the U.S. Government for doing so.

"Who thinks it is a good idea for American investors to subsidize our biggest adversary in AI, only to have the [Chinese Communist Party] use that technology to challenge us economically and militarily? Not me," wrote Republican senator John Cornyn, a member of the Senate select committee on intelligence.

If the U.S. Government thought TikTok was an aggressive data hoarder, it "ain't seen nothing yet," with Manus having infinitely more capability to harvest huge amounts of information, said Levy.

"So concerns over data integrity and privacy and, of course, geopolitical concerns — those will be prominent throughout the regulatory process, and it is not a given that the U.S. Is going to give this deal the green light."

Journalist

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