China Blocks Meta’s $2B Manus Acquisition After Lengthy Review

China’s National Development and Reform Commission (NDRC), the country’s top economic planning body, announced on Monday that it has formally vetoed Meta’s $2 billion acquisition of Manus, an AI startup originally founded in China but later relocated to Singapore. The decision effectively forces both sides to unwind the transaction, despite months of integration already underway.

A Landmark Intervention in AI

The NDRC’s move is being viewed as one of the most consequential interventions China has made in a cross-border technology deal. While U.S. and China tensions have long shaped the landscape of global tech investment, this decision signals that Beijing is willing to assert influence not only in traditional sectors like semiconductors or telecoms, but also in the emerging field of agentic AI.

For Meta, the setback is significant. The company had positioned Manus as a cornerstone of its strategy to dominate the fast-growing AI agents market, where autonomous systems are expected to reshape productivity, entertainment, and online interaction. Losing Manus could slow Meta’s momentum in a space where rivals like OpenAI, Google, and Anthropic are racing ahead.

No Explanation, But Clear Consequences

In its brief statement, the NDRC said:

“The National Development and Reform Commission (NDRC) has made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations, and has required the parties involved to withdraw the acquisition transaction.”

No further reasoning was provided. Yet the implications are already rippling outward. Roughly 100 Manus employees had moved into Meta’s Singapore offices by March, with the startup’s leadership team integrated into Meta’s reporting structure. CEO Xiao Hong was reporting directly to Meta COO Javier Olivan, underscoring how deeply the acquisition had been embedded.

Adding to the complexity, reports suggest that Hong and Manus Chief Scientist Yichao Ji are currently under exit bans, preventing them from leaving mainland China. This raises questions about the future of Manus’ leadership and whether Meta can continue to rely on its founders for strategic direction.

Meta’s Response

Meta has maintained that the acquisition was conducted in full compliance with applicable laws. A company spokesperson told TechCrunch:

“The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.”

Still, with Beijing’s order in place, Meta faces the daunting task of disentangling itself from a deal that was already well underway.

Manus’ Journey: From Beijing to Singapore

Manus was founded in 2022 by Xiao Hong, Yichao Ji, and Tao Zhang under the parent company Butterfly Effect in Beijing. By mid-2025, the founders had relocated Manus’ headquarters to Singapore, a move widely interpreted as an effort to attract international capital and avoid regulatory hurdles in China.

Meta announced its acquisition of Manus in December 2025, valuing the deal between $2 billion and $3 billion. The plan was to integrate Manus’ agentic AI technology directly into Meta AI, giving the company a competitive edge in building autonomous digital assistants.

Political and Regulatory Scrutiny

The deal had already drawn scrutiny outside China. In Washington, Senator John Cornyn raised concerns about Benchmark’s investment in Manus, questioning whether U.S. capital should be directed toward a firm with Chinese roots. His comments reflect a growing unease in the U.S. about the intersection of venture capital, national security, and AI innovation.

China’s intervention now adds another layer of complexity, suggesting that both Washington and Beijing see Manus as strategically sensitive.

What Comes Next

Manus has not responded publicly to the NDRC’s decision. For Meta, the path forward is uncertain. The company must decide whether to fight for the deal, restructure its AI ambitions, or seek alternative acquisitions.

What is clear is that the Manus case is more than a corporate setback, it is a signal of how geopolitical forces are reshaping the future of artificial intelligence. As governments tighten their grip on strategic technologies, companies like Meta may find themselves caught in the crossfire of national interests and global innovation.

© 2026 AllComputerss. All rights reserved.