New Delhi, April 29 (IANS). China has stopped Meta’s proposed $2 billion deal to buy artificial intelligence startup ‘Manus’, citing national security. According to a new report, the move shows that cross-border technology deals are now being monitored more strictly.
According to the report of Modern Diplomacy, China’s National Development and Reform Commission (NDRC) ordered the cancellation of this deal under foreign investment protection rules implemented in 2021. This makes it clear that China is keeping more control over the transfer of its country’s technology and talent to foreign companies.
The report said that this decision was taken not because of the company’s place of incorporation, but because of its internal links with China, including issues of technology development and data security.
This development also shows that China is against giving sensitive AI technology to foreign companies, especially American companies. This is also expected to increase caution among global investors who are considering such deals.
‘Manus’, a fast-growing company in the AI field, had received funding from American investors and later shifted its base abroad. According to the report, Chinese officials took seriously the company’s ties to talent and infrastructure in China.
The report further states that under this decision, the deal between ‘Meta’ and ‘Manus’ will now be withdrawn. This would include reversal of share transactions, refund of money and return of intellectual property, which is a very complex process in a sector like AI.
This case is also a signal for those Chinese-origin tech companies that want to move forward at the global level, because now the rules in strategic areas are becoming more strict.
According to the report, companies whose operations or technology are closely related to China may still come under the purview of China’s rules, even if they are registered elsewhere.
This decision is likely to increase the risk in cross-border deals. Especially when the buyer is American. With this, investors can pay more attention to keeping operations, technology and research separate in the future, so that such problems can be avoided.
–IANS
AY/DKP