Meta has just acquired a startup darling in the artificial intelligence space, capping a year of fierce competition between American tech giants vying for dominance in the world's most coveted technology.
Manus, a resident of Singapore, Based in China The firm, which specializes in agent-based artificial intelligence for small and medium-sized businesses, said Monday it will join Mark Zuckerberg's Meta, the parent company of Facebook, Instagram and WhatsApp.
Unlike AI chatbots such as ChatGPT and Deep Searchboth of which require user prompts to complete tasks, Manus claims its product can make decisions and complete tasks on its own, with far fewer prompts than its competitors.
And – unlike much of the industry, which is highly valued for its future potential, but is not yet widely profitable — he actually makes money by selling his product via subscription.
The purpose of the acquisition is to give Meta's existing platforms “a kind of brain transplant,” explained Carmi Levy, a technology analyst based in London, Ont.
Manus' technology could improve Meta's agent capabilities—such as answering questions or completing tasks—by keeping users on its platforms for longer periods of time so that Meta, as Levy puts it, “can make more money from them.”
The company will reportedly be sold for US$2 billion, a relatively inexpensive purchase compared to the dividends it could pay to its new owner, who has been on an AI buying spree this year as it competes with big players such as OpenAI and Google.
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Why did Meta take this step?
California-based Meta, now considered a legacy tech company, is “trying to reinvent its business for the new age of artificial intelligence,” Levy said.
“Developing a lot of these technologies in-house was difficult because that's not what their culture was built on,” he explained. Instead, the tech giant is buying up smaller firms and introducing new technologies into its core business “as quickly as possible.”
Back in June, Meta bought data company Scale AI for more than US$14 billion and brought in its CEO to help launch a “super-intelligent” division that will focus on the company's own artificial intelligence models, including Llama, its open-source big language model.
Meta has invested in super intelligence and advertising technology for merchants and is now trying to get consumers to use artificial intelligence through its most popular platforms, says Gil Luria, equity analyst at US investment banking firm DA Davidson. told CNBC This week.
“One of the things they saw in Manus was that it was included in [Chinese messaging app] WeChat, which is actually a model of what they want to do with WhatsApp. This is the tool that allows you to do everything – it's PayPal, it's chat, it's payments, it's everything,” Luria said.
“So by taking Manus and putting him there, Mark Zuckerberg will give us the companion he craves—a supportive friend who helps us get things done,” he said. According to Luria, this could make the app easier to monetize than it is now.
The Facebook co-founder wants Meta to be competitive in consumer-facing AI technology, “where it's fighting not only OpenAI with ChatGPT, but Google with their distribution through search, through YouTube and all their other capabilities,” Luria said.
Chinese roots may displease American regulators
The deal would first need to clear US regulators, who scrutinize Chinese-owned firms for suspected national security concerns.
The most famous precedent is the conflict between the US government and Beijing-based social media app TikTok, a decades-long saga that recently ended with parent company ByteDance. sells off its US business 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, these platforms, and what is done with that information,” Levy said.
Some of those tensions surfaced when another U.S. company invested in Beijing-based Butterfly Effect's Manus earlier this year. Venture capital firm Benchmark led a $75 million funding round in Manus back in April and was criticized by some in the US government for it.
“Who thinks it’s a good idea for American investors to subsidize our biggest AI adversary just to get [Chinese Communist Party] use this technology to challenge us economically and militarily? Not me,” wrote Republican Sen. John Cornyn, a member of the Senate Select Committee on Intelligence.
If the US government believes TikTok is an aggressive data hoarder, it “hasn't seen anything yet” because Manus has a much greater ability to collect vast amounts of information, Levy said.
“So concerns about data integrity and privacy and, of course, geopolitical concerns—those are going to be prominent throughout the regulatory process, and it's not certain that the U.S. is going to greenlight this deal.”
