Regulatory intervention forces Meta to unwind $2 billion acquisition of AI startup Manus
Beijing tightens scrutiny of foreign investment in domestic AI firms as Washington vows to defend its technology sector against undue interference ahead of a planned summit.
China's National Development and Reform Commission (NDRC) has prohibited the acquisition of Singapore-based artificial intelligence startup Manus by US tech giant Meta. The regulatory directive, issued on Monday without explicitly naming the US firm in its public statement, marks a significant tightening of scrutiny on foreign investment in domestic Chinese AI firms. This intervention occurs against a backdrop of intensifying geopolitical tensions between Beijing and Washington regarding technology transfer and intellectual property.
The move highlights Beijing's increased concern over US acquisitions of Chinese AI talent and intellectual property, even as Washington attempts to limit Chinese tech firms' access to advanced US chips. Manus, which possesses Chinese roots but is based in Singapore, develops general-purpose AI agents designed to carry out complex tasks with minimal human intervention. The commission stated that the call to annul the deal was made in accordance with Chinese laws and regulations, though it was not immediately clear on what specific legal grounds China is seeking the annulment.
Meta responded to the prohibition by stating that the transaction complied fully with applicable law and that it anticipates an appropriate resolution to the inquiry. The deal, originally announced in December, involved Manus shutting its China offices and relocating to Singapore to bypass both US investment restrictions and Chinese rules on overseas capital transfer. This relocation was intended to ensure there would be no continuing Chinese ownership interests in the company, a pledge Meta had previously made.
The regulatory intervention comes weeks before a planned mid-May summit between US President Donald Trump and Chinese President Xi Jinping in Beijing. A White House spokesperson under the Trump administration vowed to defend America's leading and innovative technology sector against undue foreign interference of any sort. This stance underscores the strategic tug-of-war where the broader context involves Washington limiting Chinese access to advanced chips while Beijing seeks to prevent the outflow of its AI talent and intellectual property to US entities.
It remains unclear on the mechanism for unwinding a completed acquisition transaction, as it is not immediately clear how the deal would be reversed if it has already been executed. The incident highlights the complex geopolitical landscape surrounding technology transfer and investment, as Chinese authorities assert greater control over foreign involvement in critical technological domains. The outcome of this specific case is likely to influence how international investors assess risks associated with acquiring companies with strong historical links to China.
The acquisition represents a rare instance of a major US tech group buying an AI company with strong historical links to China, a move forecasted to help expand AI offerings across Meta's platforms. Following a $75 million fundraising round led by US venture firm Benchmark in May 2025, Manus had moved its operations to Singapore to bypass restrictions. The Chinese bid to block the deal underscores the ongoing friction between the two nations over the governance of frontier technologies.
