China’s National Development and Reform Commission (NDRC), the country’s top economic planning agency, has ordered the cancellation of Meta’s approximately US$2 billion acquisition of AI startup Manus and required both parties to withdraw from the transaction, according to multiple reports.
Regulatory Intervention and Official Rationale
The NDRC issued a directive on April 27, announcing it had decided to prohibit foreign investment in the Manus project under relevant laws and regulations and demanded that the parties withdraw from the acquisition, as reported by TechCrunch. This move represents a sharp regulatory intervention in a cross-border deal involving strategic AI technology.
Multiple outlets—including Reuters and Bloomberg—confirmed the announcement, noting that no further detailed explanation was provided in the brief statement.
Reuters highlighted that the decision reflects Beijing’s intent to protect AI talent and intellectual property from U.S. acquisition, illustrating how AI has become a central element in U.S.–China strategic competition.
Deal Background
Meta began pursuing the acquisition of Manus in late 2023, with the deal valued at approximately US$2 billion. The goal was to integrate Manus’s general-purpose AI agent technology into Meta's platforms, including Meta AI. Manus—founded by Chinese engineers—relocated operations to Singapore, aiming to mitigate geopolitical risks and facilitate the acquisition, though the exact timing of this move is not precisely specified in reports.
Prior to the block, founders and staff of Manus had reportedly transitioned into Meta’s Singapore offices, and company executives—CEO Xiao Hong and chief scientist Yichao Ji—were reportedly subject to exit restrictions from mainland China, according to TechCrunch, though details are limited and not independently confirmed by other sources.
Meta’s Position
Meta stated that the acquisition complied with applicable laws and expressed hope for a fair resolution to the regulatory inquiry, as noted by TechCrunch, The Guardian, and AP News.
Geopolitical and Industry Implications
This regulatory action underscores heightened scrutiny over AI-related acquisitions amid intensifying rivalry between the U.S. and China. Industry analysts, including one cited by AP News, view the decision as a clear indication that China considers AI capabilities a core national security concern and is prepared to rigorously regulate their transfer. The move may deter future U.S. acquisitions of Chinese-rooted AI firms, particularly those attempting to relocate operations abroad.
Conclusion
In an uncommon step, China has unwound a near-complete acquisition of a strategic AI startup by a U.S. technology company. The Manus deal’s termination highlights rising regulatory barriers in the global AI industry and reflects broadening technology and geopolitical tensions. How Meta and Manus will disentangle the integration remains a significant and complex question.