China has ordered Meta to unwind its acquisition of AI startup Manus, a deal valued at approximately $2 billion. The National Development and Reform Commission (NDRC), through its Office of the Working Mechanism for Security Review of Foreign Investment, issued a directive prohibiting the foreign acquisition and requiring all parties to withdraw from the transaction, as reported by the Associated Press and confirmed by multiple outlets. This action underscores Beijing’s heightened scrutiny of AI-related cross-border deals.
What Happened
The NDRC’s decision, made on April 27, 2026, marks an unusual reversal of a corporate deal that had already been announced in December 2025, when Meta revealed its plan to acquire Manus, an AI developer with roots in China but headquartered in Singapore.
The acquisition, intended to enhance Meta’s AI capabilities by leveraging Manus’s autonomous AI agent technology, has now been ordered halted, with Chinese authorities mandating its unwind "in accordance with Chinese laws and regulations," as reported by the Associated Press and TechRepublic.
Regulatory and Geopolitical Context
This regulatory intervention reflects Beijing’s intent to guard domestically developed AI technology from being transferred to foreign tech giants like Meta. Observers interpret the move as a deterrent against similar transactions, especially involving firms that relocated abroad to facilitate deals.
Analysts note that even though Manus had re-incorporated in Singapore and claimed to sever continuing Chinese ownership interests, the deal was still blocked—signaling that a change in jurisdiction may not shield such transactions from China’s regulatory reach.
Meta’s Position and Next Steps
Meta issued a statement indicating that it believed the Manus transaction complied with applicable laws and expressed its expectation for an appropriate resolution to the inquiry, as reported by AP.
It remains unclear how Meta might reverse or restructure the deal. Manus personnel have already begun integrating into Meta’s AI teams, and investors are reported to have received payouts—raising complex logistical and legal questions around unwinding the transaction.
Implications for Tech M&A
This decision could set a precedent for stringent handling of outbound deals involving Chinese-rooted AI startups, regardless of their current domicile. It signals that regulatory clearance in other jurisdictions may not guarantee immunity from domestic security reviews by Beijing.
More broadly, the move underscores intensifying U.S.–China competition in AI and the role of national security considerations in shaping cross-border investment.
Conclusion
China’s blocking of Meta’s acquisition of Manus AI highlights the increasingly assertive posture Beijing is taking to protect strategic AI capabilities. For global tech companies and investors, it serves as a cautionary tale: even firms that relocate or rebrand may remain subject to the regulatory influence of their origin countries.