China blocks Meta's $2 billion Manus acquisition as US-China AI rivalry intensifies

China kills Meta's acquisition of Manus as US-China AI rivalry deepens

China has blocked US tech giant Meta's acquisition of the AI company Manus that was founded by Chinese tech entrepreneurs. That development indicates how difficult it has become for US and Chinese tech companies to strike and sustain such deals as government authorities on both sides take an increasingly hard line amid the deepening US-China AI rivalry. The Chinese government formally asked Meta to unwind the acquisition on April 27 after deciding to ban foreign investment in Manus based on national security concerns. It had already spent months officially scrutinizing Meta's $2 billion acquisition of Manus that took place in December 2025 -- Chinese regulators announced they were reviewing the deal in January 2026 and instructed the two Manus cofounders to not leave China while the investigation was ongoing, according to The Wall Street Journal. Manus burst onto the scene in March 2025 with its "general AI agent," designed to help users with tasks such as searching real estate sites for a new home or booking airline tickets and hotels for an international trip. The Manus AI agent is an "agentic wrapper" or "agentic harness" that enables an underlying AI model -- in this case, Anthropic's Claude 3.7 Sonnet -- to take actions to carry out user requests. But Manus actually incorporates multiple AI agents to perform and verify tasks, including a planner agent that assigns tasks and an executor agent that can browse and interact with websites, create spreadsheets, use various software tools, and even code new applications. That quickly drew the attention of Silicon Valley and Meta in particular, given CEO Mark Zuckerberg's big business push in 2025 to develop "personal [AI] superintelligence for everyone." When Meta acquired Manus, the US tech company began incorporating the Manus AI agent into its services, such as Meta's Ads Manager, which is the main platform for advertisers to create and track ad campaigns on Meta's social media platforms like Facebook, Instagram, Messenger, and WhatsApp. The ties that bind The Manus founders, Xiao Hong and Ji Yichao, have already relocated most of their team from China to Meta's Singapore office and have taken pains to cut any lingering Chinese ties in the lead-up to the Meta acquisition late last year -- even turning down Chinese authorities' requests for meetings or investment, according to The Wire China. They paved the way for the move to Singapore by registering the firm Butterfly Effect Pte and setting up Butterfly Effect Holding as a parent company based in the Cayman Islands. Now, the Chinese government's decision to quash the deal creates significant uncertainty for both Manus and Meta's future AI ambitions. For example, Manus may not be able to continue deploying its AI agent service using Anthropic's Claude models, given that Anthropic has restricted AI sales to entities in China. "If Manus had remained a Chinese company, its core product would have disappeared," said Chris McGuire, a former national security official with the Biden administration who designed US restrictions on tech exports and investments relating to China, in an interview with The Wire China. The unwinding of the deal would also represent a setback to Meta's pivot to AI, which comes after the US tech company spent $80 billion over half a decade in an attempt to make the metaverse catch on with consumers. Beyond incorporating the Manus AI agent into its own services, Meta has "deeply integrated" the Manus team with Meta's own teams in the Singapore office, according to The New York Times. What is clearer is that Chinese tech founders face dim prospects when trying to pivot from being a homegrown Chinese company to the US tech scene. The apparent failure in this case of the "Singapore-washing" model, frequently used by Chinese tech founders attempting to reestablish their company outside of China, suggests that founders will need to think about setting up shop outside China from "day one," said Wayne Shiong, managing partner of the Silicon Valley seed investment firm Argo Venture Partners, in a CNBC interview.

China vetoes Meta's $2B Manus deal after months-long probe | TechCrunch

China's top economic planner, the National Development and Reform Commission (NDRC), said on Monday it has blocked Meta's $2 billion acquisition of Manus, an agentic AI startup founded by Chinese engineers that relocated to Singapore before Mark Zuckerberg scooped it up late last year. The move marks one of China's most significant interventions in a cross-border deal, one that extends well beyond U.S.-China tensions and into the broader AI industry. For Meta, it could deal a serious blow to its ambitions in the fast-moving AI agents space. With no explanation offered, China's NDRC ordered both parties to unwind the deal entirely. "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," it said. But the situation is far from straightforward. Around 100 Manus employees have already moved into Meta's Singapore offices as of March, with founders taking on executive roles. CEO Xiao Hong now reports directly to Meta COO Javier Olivan. Manus CEO Hong and Chief Scientist Yichao Ji are reportedly under exit bans, preventing them from leaving mainland China. "The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry," a spokesperson at Meta told TechCrunch. Founded in 2022 by Hong, Ji and Tao Zhang, Manus relocated its headquarters from China to Singapore around mid-2025. Just months later, Meta came knocking. The company announced its acquisition of Manus in December 2025 for roughly $2 billion to $3 billion, with plans to fold its agent technology directly into Meta AI. Meta has agreed to acquire Singapore-based AI startup Manus, with the deal requiring a full exit from Chinese ownership and operations, per Nikkei Asia. But the company's origins trace back to China. Manus' founders previously established its parent company, Butterfly Effect, in Beijing in 2022 before relocating to Singapore. That background has drawn scrutiny in Washington, where Senator John Cornyn has already raised concerns about Benchmark's investment in the company, questioning whether American capital should be flowing to a Chinese-linked firm, TechCrunch pointed out, citing Cornyn's post on X. Manus did not respond to TechCrunch's request for comment.

Xi Is Right to Close the Pandora's Box Manus Opened

China is ordering Meta Platforms Inc. to cancel its acquisition of AI startup Manus only weeks before a much-anticipated meeting between US President Donald Trump and his counterpart Xi Jinping. The abruptness and the timing -- the deal was sealed four months prior and Meta has already integrated Manus into some of its tools -- is sending shock waves through the venture capital world. It's reminiscent of Beijing's last-minute decision to halt Ant Group Co.'s $34 billion public listing in late 2020, the first shot of a yearslong regulatory crackdown on big tech companies that ended with multibillion-dollar losses for global investors. While the gesture comes across as harsh, China has good reasons to close a loophole Manus used to make its senior management and early backers massively wealthy. Launched in March 2025, the startup claimed to have built the world's first general-purpose AI agent that "turns your thoughts into actions," even though early users found its software glitchy. In April, it secured funding from US venture firm Benchmark at a $500 million valuation. By July, Manus relocated its headquarters to Singapore, laid off most of its staff in China, and transferred its core technical personnel to the city-state. By year-end, the firm found itself a strategic buyer, selling to Meta for more than $2 billion. Manus' speedy cash-out put Luckin Coffee Inc., which went from first-store opening to a Nasdaq IPO in 2019 in less than two years, to shame. (Luckin was de-listed a year later over allegations of accounting fraud.) The AI startup's breathless corporate timeline alone might raise Xi's eyebrows. The president has long advocated for "patient capital," preferring investments that generate healthy long-term returns over quick profit-taking. Venture capital culture aside, it's more about who gets to collect the abundant engineer dividend in China. From the government's viewpoint, it has some claims to Manus' success because innovative breakthroughs would not have happened had Beijing not spent big on higher education, creating a young, cheap and abundant engineering pool. Manus Chief Executive Xiao Hong himself is a product of China's push into STEM education -- he studied software engineering at Huazhong University of Science and Technology in Wuhan. In March, Xiao and his co-founder were barred from leaving the country because of a regulatory review. By re-labeling itself Singaporean and moving the engineering wizards out, Manus essentially was saying that the public good Beijing provided had no value. Chinese society at large certainly hasn't gained from Manus -- there are no jobs created, no capital gains for stock investors, or tax receipts for municipalities. Rather, the technology was sold to and used by an American company. If other young AI startups followed suit, what's the point of funding higher education and academic research in China? This might be the ultimate red line that Manus crossed. With the latest decree, the government is making sure there won't be similar deals in the future. Of course, there are also geopolitical and capital markets considerations. China still wants what the US has, especially high-end semiconductors used to train AI large-language models. By keeping core technology at home, Xi can perhaps allow American companies to license Chinese products in exchange for access to the latest innovations in Silicon Valley. Last year, TikTok's US business, owned by China's ByteDance Co., became a useful tool in trade negotiations with the White House. Sign up for the Bloomberg Opinion bundle Sign up for the Bloomberg Opinion bundle Sign up for the Bloomberg Opinion bundle Get Matt Levine's Money Stuff, John Authers' Points of Return and Jessica Karl's Opinion Today. Get Matt Levine's Money Stuff, John Authers' Points of Return and Jessica Karl's Opinion Today. Get Matt Levine's Money Stuff, John Authers' Points of Return and Jessica Karl's Opinion Today. Plus Signed UpPlus Sign UpPlus Sign Up By continuing, I agree to the Privacy Policy and Terms of Service. Meanwhile, China may not want the frenzied dealmaking in the US to affect organic development in the domestic industry either. Hyperscalers have been quick to write billion-dollar checks to startups, sometimes just as a hedge so they don't miss out on the next phase of the AI development. Last year, Meta spent $16 billion on acquisitions alone, on top of mega infrastructure deals to secure computing capacity. When Silicon Valley is in spending mode, it's only too easy for Chinese startups to be sold prematurely. To be sure, Xi needs to be mindful that his latest policy moves are not seen as a repeat of the tech crackdown during the pandemic, and that US venture capital can still deploy capital in China, perhaps alongside Chinese peers. Nonetheless, Manus' clever maneuvers have gone too far. You can't blame Beijing for calling it out. Otherwise, what kind of example does the unicorn set for China's nascent AI software industry? More From Bloomberg Opinion: * China's AI Clampdown Will Backfire: Catherine Thorbecke * This Chip Supercycle Has One Collective Blindspot: Shuli Ren * Hate to Suggest Partying Like It's 1999, But...: John Authers Want more Bloomberg Opinion? OPIN <GO> . Or you can subscribe to our daily newsletter .

China blocks Meta's acquisition of AI outfit Manus

China has blocked Meta's acquisition of AI upstart Manus. A brief Monday statement from the Middle Kingdom's foreign investment regulator says Beijing "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." Manus burst onto the scene in March 2025 with what it called a "general agent" that used a hosted Ubuntu desktop to undertake tasks on users' behalf. The company and its tech caught the eye of social networking giant Meta, which bought Manus in December 2025. Manus made itself easy prey by moving its headquarters to Singapore to evade Chinese regulators and gain easier access to capital. China took a dim view of that idea and, in January 2026, started an investigation into the acquisition. That investigation concluded with the decision to prevent the transaction that would have seen Manus become part of Meta. Beijing and Washington both feel that locally-made-and-controlled AI is a strategic asset, so restrict exports of what they see as significant technologies. One way to exert that control is by disallowing foreign investments, a practice that is common around the world and across many classes of technologies and commodities. China's decision to use a foreign investment review to stop Meta buying Manus is therefore not unusual. The decision is, however, a signal that Beijing doesn't like the idea of Chinese AI becoming Western property, and that China's government won't look favorably on local companies that shift to other countries. What it means for Meta is anyone's guess. Talks between acquired companies and their soon-to-be-owners often progress to detailed technical matters. Zuck's AI operatives may already know plenty about Manus's technology without having yet taken possession of its source code and team. Meta has said its use of AI has helped to boost its advertising business and has made its products even more addictive/engaging, but it has yet to deliver a consumer-facing AI product, its recent models mostly underwhelmed AI observers, and the company is yet to get anywhere near realizing CEO-for-life Mark Zuckerberg's vision of delivering a "personal superintelligence" that will assist its customers to navigate life. ®

China's Mao-era regulator in a stand-off with Meta over AI

China's abrupt order to Meta to unwind its $2bn deal for an emerging AI champion has made clear the growing power of the country's state development agency, which is becoming the chief enforcer of Beijing's efforts to exert more control over security-sensitive issues in the economy. Founded more than 70 years ago as a Mao-era champion of the planned economy, the National Development and Reform Commission is now spearheading Beijing's efforts to assert its strategic interests in an era of geopolitical tension with the US. This week's call for Meta to unwind the deal comes just weeks ahead of a summit between US President Donald Trump and China's Xi Jinping, as both leaders seek to address longstanding tensions on trade. Under the influence of China's powerful economic tsar He Lifeng -- a former head of NDRC who is now Xi's chief negotiator in trade talks with the US -- the agency has widened its regulatory scope. Traditionally responsible for long-term economic planning, state investment projects and strategic sectors such as energy and defence, over the past year the NDRC has shaped policy on everything ranging from Nvidia chip purchases to the Panama ports deal and now Meta's purchase of Manus. Its expanded role has made it a powerful potential regulator for companies from Big Tech to AI start-ups and an arbiter of investment decisions akin to Washington's powerful Committee for Foreign Investment in the US. Cfius assesses foreign investments in the US to identify security risks. "The NDRC is emerging as the leading agency of China's version of Cfius," said Winston Ma, an adjunct professor at NYU law school and a former managing director at Chinese sovereign fund CIC. This week's order marks the first publicly disclosed case under NDRC's foreign investment security review regime -- designed to promote investment while "preventing and resolving national security risks" -- that was approved by the state council and rubber-stamp parliament in 2021. Previously, power was fragmented across multiple Chinese regulators, including the commerce ministry, the securities regulator and the NDRC. "The global macro environment has shifted, and China is also looking to exert greater control over supply chains, key minerals and critical technologies," said Zhan Kai, a Shanghai-based global partner at Chinese law firm Yuanda. "That is also the context behind the Meta-Manus case, which is essentially about control over core and advanced technologies." The NDRC's order to Meta to unwind its $2bn acquisition of AI app Manus marked an extraordinary late-stage intervention of a deal announced in December. The public announcement of the decision is seen as serving as a regulatory warning to other companies, in this case those who might want to sell to a non-Chinese company without approval. A commentary published on state media on Tuesday said that what "is being prohibited is the non-compliant practice of companies 'going offshore through washing'". Manus had relocated to Singapore but the fact that Manus's "early-stage R&D was mainly conducted in China, and its technical team consisted of Chinese engineers" means that "the movement of its personnel, technology and data is inherently linked to China's interests", the CCTV commentary said. The NDRC's handling of the Meta-Manus deal "suggests Beijing disagrees with a particular exit path for Chinese young AI start-ups, and is now closing that path systematically", said Ma. China's leverage with Meta could include the more than 10 per cent of global revenues the company receives from Chinese advertisers, its reliance on Chinese company Goertek for the supply chain for Meta AI glasses and pressure on Manus' Chinese employees in Beijing, according to one person familiar with the matter. The NDRC's influence has become increasingly visible across a wide range of sectors. In April, it told Europe's two largest shipping companies Maersk and Mediterranean Shipping Company to cease operating ports on the Panama Canal, just weeks after they took over from a Hong Kong-based group ejected from the terminals. In semiconductors, the NDRC has taken on a central co-ordinating role, aligning resources across ministries and companies to support strategic projects such as extreme ultraviolet lithography (EUV), a critical piece of equipment used to produce the most advanced chips, according to people familiar with the matter. In order to help Chinese semiconductor players catch up with their global peers, the NDRC also instructed Chinese tech groups such as ByteDance and Alibaba to curb purchases of Nvidia's more advanced chips and support domestic chipmakers led by Huawei and Cambricon instead. NDRC did not immediately respond to a request for comment. "There is a growing emphasis on national security globally, and the same logic applies in the US. China is not doing anything fundamentally different," Zhan said. "The regulatory tool kits for advanced technology products in Europe, the United States, and China are becoming increasingly diverse," said Liu Xu, a research fellow at the National Strategy Institute of Tsinghua University. "This will create more uncertainty for founding teams," he noted. Business may migrate to "countries with the most lenient regulatory environments and less complex geopolitical situations". Additional reporting by Joe Leahy and Cheng Leng in Beijing, Zijing Wu in Hong Kong and Hannah Murphy in San Francisco

Blocking of Meta's AI startup buy raises risk for cross-border China tech deals

BEIJING/HONG KONG/SINGAPORE, April 28 (Reuters) - China's blocking of Meta's acquisition of AI startup Manus will heighten the risk for global investors looking to invest in advanced tech firms with ties to the country amid Beijing's expansion of jurisdictional reach to safeguard strategic assets. The National Development and Reform Commission (NDRC), in a rare case, ordered on Monday that the $2-billion-plus acquisition by Meta (META.O), opens new tab be unwound under Beijing's national security review mechanism of foreign investments that came into effect in 2021. The powerful state planner's move to block a China-founded and Singapore-headquartered company's takeover will discourage stake or asset transfers by homegrown companies to foreign investors without Beijing's approval, lawyers and analysts said. "Beijing effectively drew a bright red line that Chinese AI talent and technology are not for sale to American companies, full stop," said Han Shen Lin, Shanghai-based China country director at U.S. consultancy firm The Asia Group. It was not immediately clear how Meta would unwind the completed acquisition of Manus, but the Wall Street Journal said on Tuesday, citing people familiar with the matter that the California-based tech giant was preparing to do so. Meta and the NDRC did not immediately respond to a Reuters request for comment. On the NDRC decision, China's state-backed Global Times said on Tuesday the issue was not the location of Manus' incorporation or management team but rather "the extent of its connections to China in terms of technology, talent, and data", as well as whether the transaction could jeopardise China's industrial security and development interests. The biggest point of ⁠contention was that Manus, an AI company built on the work of Chinese engineers and the Chinese infrastructure environment, abruptly "cut ties" with China after receiving U.S. investment, the report added. Manus, an agent tool built atop Western and local AI models that can autonomously execute complex tasks, was hailed last year by state media as a paragon of China's AI innovation alongside large language model-builder DeepSeek. A year after Manus' launch, its co-founders, CEO Xiao Hong and chief scientist Ji Yichao, have been barred from leaving China after being summoned to Beijing for talks with regulators in March, sources have said. The NDRC move comes weeks before a planned mid-May summit between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing. CHINA ROOTS Manus could become a cautionary tale for Chinese AI entrepreneurs whose ambitions chafed against the Communist Party's red lines, and whose business ultimately could not survive the shifting faultlines of U.S.-China tech competition. Although Manus did not develop its own artificial intelligence models, Beijing views AI as a sensitive sector critical to national security and has made efforts to control outbound flows of technology, IP and talent. "This is perhaps a warning shot that having a Singapore set-up is not entirely a silver bullet. If the business still has deep China roots, Beijing may treat it as effectively domestic for sensitive transactions," said Lam Zhen Guang, a lawyer at Clyde & Co. Investors in a China-founded business will demand real operational separation, such as IP assignment, R&D relocation, governance, and clean ownership disclosures, rather than a paper relocation, Lam said. "For founders and VCs, the takeaway is deal certainty risk. Cross-border exits, especially to U.S. buyers, may now carry a higher China regulatory discount ⁠unless approvals and China touchpoints are solved early," Lam added. Meta conducted only a few weeks of due diligence to complete the acquisition in December, while neither Meta nor Manus sought Chinese regulatory approval for the deal or its relocation to Singapore, said five sources with knowledge of the matter. At that time, Meta was in a frantic search globally for AI targets, as it aimed to compete with industry peers which had gone ahead with in-house models, said a former investor in Manus. The Singapore relocation for Manus was necessary, the founders believed, for the company to survive amid heightened U.S.-China geopolitical tensions and increased regulatory scrutiny of tech investments, said a separate person with knowledge of the thinking of Manus. Those moves angered senior Chinese officials, whose subsequent investigation had a chilling effect on other Chinese tech startups and investors, said the sources who declined to be named due to the sensitivity of the matter. After the acquisition ⁠was announced in December, Manus became part of Meta and all its previous investors, including U.S.-based Benchmark Capital, China's HSG, ZhenFund and Tencent Holdings (0700.HK), opens new tab, exited the company, sources said. Tencent declined to comment. The investment firms did not immediately respond to Reuters requests for comment. 'UNSCRAMBLING THE EGGS' The unwinding of the Manus acquisition will be complex and may involve reversing equity transfers, returning funds and requiring the deletion of transferred code, data and other intellectual property, as well as withdrawing personnel, said Andy Han, a partner at AllBright Law Offices in Qingdao. "Fully reversing such transactions is often difficult in reality, particularly in knowledge-intensive sectors, ⁠as information already absorbed by engineers or transferred during due diligence cannot easily be undone," Han said. Meta said on Monday the transaction complied fully with applicable law and that it would anticipate an appropriate resolution to the inquiry. "Unscrambling the eggs is always an issue when a deal is blocked by a regulator, unless the acquirer has kept the target separate, which does not appear to have been the case here," said Jeremie Jourdan, a Brussels-based partner at European law firm Geradin Partners. "The fact that Manus moved to Singapore will make it harder for ⁠the Chinese authority to enforce their ruling, but they may have other means to force Meta to comply by going after their assets in China," Jourdan said. China's latest regulatory move comes at a time when global investors were increasing their wagers on Chinese artificial intelligence companies, betting on the next DeepSeek and seeking to diversify their holdings. "Any U.S. technology company considering acquiring a Chinese-founded AI startup must now treat NDRC foreign investment security review as a genuine deal risk, regardless of where that company is incorporated," said Asia Group's Lin. Reporting by Kane Wu in Hong Kong; Eduardo Baptista, Laurie Chen and Antoni Slodkowski in Beijing; Fanny Potkin and Jun Yuan Yong in Singapore; Additional reporting by Jaspreet Singh in Bengaluru; Editing by Sumeet Chatterjee and Muralikumar Anantharaman Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * Mergers & Acquisitions Kane Wu Thomson Reuters Kane Wu covers M&A, private equity, venture capital and investment banks in Asia. She tracks the region's most high-profile deals, fundraisings as well as investment trends amidst geopolitical, macroeconomic and regulatory changes. She was nominated for a SOPA Excellence in Business Reporting award for coverage of China regulatory crackdown in 2021. Prior to Reuters, she worked at the Wall Street Journal and also wrote about Asia's loan market for Thomson Reuters Basis Point. She is based in Hong Kong. Laurie Chen Thomson Reuters Laurie Chen is a China Correspondent at Reuters' Beijing bureau, covering politics and general news. Before joining Reuters, she reported on China for six years at Agence France-Presse and the South China Morning Post in Hong Kong. She speaks fluent Mandarin. Eduardo Baptista Thomson Reuters Eduardo Baptista is a Senior Correspondent for Reuters based in Beijing, covering China's technology, space, and automotive industries. He has led enterprise and investigative reporting on China's military-linked companies, artificial intelligence and semiconductor supply chains, as well as macroeconomic and industrial policy. Baptista has reported from China for nearly a decade and holds a BA in History from the University of Cambridge.

Op-ed: In blocking Meta-Manus deal, China sends a powerful message to U.S. market about AI race

Mark Zuckerberg, CEO of Meta testifies before the Senate Judiciary Committee at the Dirksen Senate Office Building on January 31, 2024 in Washington, DC. When Meta agreed to acquire Manus, a Singapore-based artificial intelligence startup with Chinese roots for roughly $2 billion last December, many saw the transaction as just another routine deal in today's global technology economy: capital crossing borders, startups relocating to friendlier jurisdictions, and major platform companies acquiring talent and intellectual property in the race to build the next generation of AI systems. But for those who have been following U.S.-China strategic competition, particularly in the fiercely contested technology sector, the announcement should have raised yellow flags, if not red ones. What initially looked like a straightforward acquisition quickly became something far more consequential. This week, Beijing ordered the deal reversed, and Meta has indicated that, for now at least, it will comply. Mark Zuckerberg may seek assistance from U.S. President Donald Trump during his anticipated visit to China, but for those who still view China as operating largely within a global economic system shaped by Western rules and institutions, episodes like this offer another bold reminder of how Beijing approaches technology, investment, and competition. The Manus situation is simply the latest in a long line of developments that reveal how China intends to compete in these sectors. Antitrust law, investment restrictions, and regulatory authority are not instruments used exclusively by Western governments. Beijing has its own versions of these tools and has shown that it is prepared to use them just as forcefully when technological capabilities or national interests are at stake -- in the Manus case, it is doing so in defense of an innovation ecosystem, a technology stack, and an engineering talent base it is determined to protect. Formally, the decision to halt the transaction will likely be justified under China's Anti-Monopoly Law. Regulators can argue that the law provides the legal basis for prohibiting foreign investment in Manus and requiring the parties to cancel the deal. Yet the sequence of events surrounding the acquisition makes clear that the issue was never simply about antitrust law. Beijing has long treated advanced technology transactions as matters of national security, even when the legal framing rests in competition policy. Chinese officials reviewing the acquisition reportedly described it as a "conspiratorial" attempt to hollow out the country's technology base -- language should scare anyone seeking deals in this space. Regulators examined the transaction through multiple channels, including export control rules, foreign investment restrictions, and competition law. At one stage of the review process, authorities even restricted two Manus co-founders from leaving the country, according to the FT. These are not typical features of a conventional antitrust inquiry. They reflect a government determined to prevent the outward transfer of technological capabilities it considers strategically important, particularly when those capabilities could benefit its principal geopolitical rival. The episode becomes even more revealing when viewed in light of Manus's earlier corporate move. Last summer, the company shut down its mainland China operations and relocated to Singapore. The restructuring was reviewed by Chinese regulators, including the National Development and Reform Commission. Officials initially concluded that the relocation did not warrant strict controls. The decision reflected a common pattern in China's technology sector, where startups establish offshore corporate structures to access global capital while maintaining engineering talent and intellectual ties to the mainland. The move also reflects a broader phenomenon sometimes described as "Singapore washing." In recent years, several Chinese technology firms have relocated corporate headquarters to Singapore seeking to present themselves as global companies rather than Chinese firms. The strategy allows startups to access international capital markets, reassure foreign investors, and sometimes soften regulatory scrutiny. But the Manus episode illustrates the limits of that strategy. Simply shifting corporate registration offshore does not place a company beyond China's extraterritorial control and regulatory reach if its technology, founders, or research ecosystem remain tied to the mainland. What some entrepreneurs view as regulatory arbitrage increasingly looks, from Beijing's perspective, like an attempt to move strategically important technology assets beyond state oversight. The Chinese government's determination to make sure this does not happen was made clear once Meta emerged as the acquirer. According to multiple reports, the decision to block the acquisition was elevated beyond economic regulators to China's National Security Commission, the Communist Party body chaired by Xi Jinping that oversees national security strategy. The institutional distinction is significant. The National Development and Reform Commission is a ministerial-level agency of the State Council and functions as a central economic planning and industrial policy body within the Chinese government. The National Security Commission, by contrast, is not a state regulator but a senior Communist Party organ that coordinates national security strategy across the party-state system. In China's governing structure, the Communist Party sits above the formal institutions of the state, and party bodies ultimately shape the strategic direction that government agencies implement. When a transaction is elevated from review by a state economic agency to consideration by a party national security body, the calculus changes. At that level, decisions are evaluated through a broader strategic lens that integrates economic resilience, technological development, and geopolitical competition -- narrow legal or economic considerations rarely determine the outcome. In this particular case, legal justification will flow through China's Anti-Monopoly Law, first enacted in 2008 and strengthened through amendments in 2022, and originally presented as a mechanism to ensure fair market competition. But it is important for foreign companies to know and understand that in practice, it has also become a flexible instrument of economic statecraft. When Beijing wishes to shape the outcome of a transaction, signal displeasure, or slow the advance of foreign competitors in strategic sectors, antitrust enforcement has proven an effective tool. In 2018, Qualcomm's $44 billion attempt to acquire Dutch semiconductor firm NXP collapsed after Chinese regulators declined to grant antitrust approval despite the deal clearing other major jurisdictions. More recently, Nvidia's doomed effort to acquire the British chip designer Arm Holdings encountered regulatory scrutiny across multiple jurisdictions, including China, before collapsing under the weight of geopolitical and competition concerns. Antitrust law is only one element of a broader toolkit. Export controls, data security laws, and investment screening mechanisms increasingly function as instruments of a broader Chinese economic and geopolitical strategy tied to technology. Many U.S. companies have been eager to get back to dealing and deal making in China, particularly its hot innovation sector. A period of what might be described as "opportunistic ambiguity" in Washington may have contributed to complacency surrounding deals like the Meta-Manus transaction. During the Biden administration, the United States articulated a relatively clear framework for strategic competition with China. Policies such as the "small yard, high fence" approach made explicit that advanced technologies like semiconductors and artificial intelligence would be treated through a national security lens in the United States -- just like it is in China. However, today the U.S. approach appears less clearly defined. That ambiguity has encouraged some investors and companies to believe that the era of geopolitics dominating cross-border economic activity may be receding. Eager for the return of what markets often describe as "animal spirits," many have rushed back toward opportunities involving Chinese technology firms. Beijing has shown no such inclination. For China's leadership, national security remains the organizing principle behind economic, technological, and regulatory decisions, particularly within its innovation ecosystem. For multinational technology companies, the implication is clear. Deals involving Chinese talent, intellectual property, or technological capabilities will not be evaluated solely through commercial logic. They will be judged through the lens of strategic competition between Washington and Beijing. Corporate transactions in this sector should not be viewed as routine. There is no such thing as opportunistic ambiguity in China. Beijing still views the world through a largely geopolitical lens. U.S. companies that operate ignorant of this fact or disdainful of it do so at their own risk.

China blocks Meta from acquiring AI startup Manus

HONG KONG (AP) -- China on Monday blocked Meta's acquisition of the artificial intelligence startup Manus, which has Chinese roots but is Singapore-based. In a short statement, China's National Development and Reform Commission, the country's top planning agency, said it was prohibiting a foreign acquisition of Manus and had required all the parties to withdraw from the deal. It did not specifically name Meta, which owns Facebook and Instagram. The decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. It came after Chinese authorities said they were looking into the deal earlier this year. The commission did not elaborate on the reasons for the ban. Meta first announced that it was acquiring Manus in December in a rare case of a major U.S. tech group buying an AI company with strong links to China. Its deal with Manus, whose "general-purpose" AI agent can perform multi-step complex work autonomously, was expected to help expand AI offerings across Meta's platforms. Meta had said there would be "no continuing Chinese ownership interests in Manus" and that Manus would discontinue its services and operations in China. But China said in January that it would investigate whether the acquisition would be consistent with its laws and regulations. China's commerce ministry said at the time that any enterprises engaging in outward investment, technology exports, data transfers and cross-border acquisitions must comply with Chinese law. Meta had said most of Manus' employees were based in Singapore. Meta said on Monday in a response that the transaction "complied fully with applicable law." "We anticipate an appropriate resolution to the inquiry," the California-based company said in a statement.

Meta Deal Reversal Deepens Split Between China and Silicon Valley

Meaghan Tobin reported from Taipei, Taiwan, and Erin Griffith from San Francisco. Manus began with an idea among three engineers in Wuhan, China, united by an obsession with artificial intelligence and a shared ambition to build a global venture. From the start, they looked beyond China. Their big break came last March. Manus had drawn the attention of Silicon Valley investors with an A.I. agent capable of carrying out tasks on its own. By year's end, Meta had agreed to acquire Manus. It looked like a clean breakout from China's crowded, tightly-regulated market and a path to the world stage. Then, on Monday, the Chinese government stepped in and demanded that the $2 billion deal be undone. A decade ago, Silicon Valley investors raced to back Chinese start-ups. Today, few do. Deals like Meta's acquisition of Manus were already rare, as China's tech sector drifted from American capital. Beijing's intervention sharpens the split. Investors and founders say the move reflects a fragmenting landscape. Chinese start-ups are raising money at home and building for domestic markets, while U.S. investors steer clear of the scrutiny that comes with backing them. "Great founders and free markets used to decide who won, but increasingly, outside forces may have the final say," said Linus Liang, an investor at Kyber Knight, a venture firm based in San Francisco. Mr. Liang said his firm had already been cautious about cross-border investments because of the risks and complexity. But the Manus episode underscored that A.I. products and talent are now treated "like strategic national assets," he said. It has further chilled an already weak market. Deals involving Chinese companies and foreign investors have dropped sharply since 2021, according to PitchBook, which tracks private investment. In 2024, the number of deals was down 73 percent from the 2021 peak, while the total value of such transactions dropped to $7.8 billion from $54 billion. Things were not always this way. In the 2010s, American investment firms flocked to China, drawn by Silicon Valley-style growth and encouraged by policymakers in Washington. Goldman Sachs and Fidelity were early investors in Alibaba, the e-commerce giant. Tiger Global and Coatue Management were early investors in Didi Chuxing Technology Company, known as the Uber of China. And General Atlantic and Sequoia Capital backed ByteDance, the parent company of TikTok. By 2016, however, officials in the Obama administration were raising concerns about unfair competition and government interference. Want to stay updated on what's happening in China? Sign up for Your Places: Global Update, and we'll send our latest coverage to your inbox. Tensions escalated under President Trump, who moved to ban TikTok in 2020. Relations worsened a few years later, when Congress investigated U.S. venture capital investments in Chinese companies with military ties. President Joseph R. Biden Jr. issued an executive order barring U.S. investments in certain Chinese technologies, including artificial intelligence. Many firms have since pulled back. Some firms with a large presence in China, including Sequoia Capital and GGV Capital, split their Chinese funds into separate firms. GGV renamed its U.S. business to Notable Capital and rebranded its Asia business as Granite Asia. Sequoia spun off its China unit, now called HSG. Chinese founders must now consider the composition of their investors early on. Too much Chinese funding could scare off American investors wary of regulatory scrutiny, while global expansion may invite the kind of unwanted attention faced by companies like TikTok and the fast-fashion retailer Shein. Both moved their headquarters to Singapore, but neither shed the perception of Chinese ties. An A.I. start-up founder in China, who has worked at major U.S. and Chinese tech companies and raised money abroad but not in the United States, said it takes too much effort to convince Silicon Valley investors that a business can be separated from China. It is not worth the effort, said the entrepreneur, who asked not to be identified to avoid drawing the attention of Chinese officials. Most founders, he added, are choosing to stay in China and raise money locally. Some are turning instead to investors in Southeast Asia, the Middle East and Australia. While Silicon Valley venture capital firms can back companies like OpenAI and Anthropic, investors elsewhere, with fewer promising A.I. start-ups at home, remain interested in China. Manus tried to bridge those two worlds. Founded by Chinese engineers with a Chinese parent company, it was incorporated offshore and structured as a foreign-owned entity in China with offices in Beijing and Wuhan. Silicon Valley took notice. Venture firm Benchmark led a $75 million funding round in March 2025, and its partner Chetan Puttagunta joined the board as the founders moved the company to Singapore. By December, Manus said it had surpassed $100 million in annual recurring revenue. Mr. Puttagunta did not respond to a request for comment. When Meta acquired Manus, many saw a new playbook for Chinese start-ups. That is no longer the case. Homan Yuen, an investor at Keymaker VC, a venture capital firm based in Menlo Park, Calif., said the move would slow the pipeline of Chinese companies relocating to Singapore to raise U.S. funding and expand. Over time, he added, it could strengthen China's tech ecosystem. "They'll continue to build for themselves, as opposed to trying to sell or get acquired," he said. China requires approval for the export of certain sensitive and advanced technologies. It is now clear that regulators now count A.I. products among them. How the acquisition will be unwound remains unclear. After Meta paid for Manus in late December, the funds were wired to Manus's shareholders in the ensuing weeks. Venture backers, including Benchmark, distributed the proceeds to the investors in their funds, according to a person familiar with the transaction. Clawing the money back would be a complicated, if not impossible, the person said. Meta has already had access to Manus's technology and engineers for months and has described the two teams as "deeply integrated." Meta said in a statement on Monday that the transaction complied with applicable law and that it expected an "appropriate resolution." The company declined to comment further. Several Chinese firms with previous investments in Manus did not return emails seeking comment. Benjamin Qiu, a lawyer at Pierson Ferdinand in New York who has spent two decades advising Chinese tech companies on foreign investment and cross-border deals, outlined a possible fix. Meta could sell a majority ownership in Manus to Beijing-approved investors and instead pay to license Manus' technology, mirroring the arrangement under which American investors license TikTok's U.S. operations from its Chinese parent company ByteDance. But whatever the outcome, the message from the Chinese government is clear: It intends to keep top talent and technology from leaving the country. "Beijing is nervous about a flight of tech talent together with its deemed crown jewels in A.I.," Mr. Qiu said. That approach might come at a cost, said Graham Webster, an academic focused on geopolitics and technology at Stanford University. "It's going to continue to be a drag on entrepreneurs in China if people don't think they can sell their start-ups to the companies that want to buy them," Mr. Webster said. "The Chinese market is huge, but it's one-fifth of humanity. Then there's the other 80 percent." Xinyun Wu contributed reporting from Taipei.

China blocks Meta's $2bn acquisition of AI start-up Manus

Facebook-owner Meta's acquisition of AI start-up Manus has been blocked by Chinese regulators. Announced in late December, Meta said the deal - estimated to be worth around $2bn (£1.48bn) at the time - would see Manus' agents used to boost to its own AI across its platforms. But reports on Monday said Beijing's National Development and Reform Commission had prohibited foreign investment in the deal, requiring "the parties involved to withdraw the acquisition transaction". A Meta spokesperson told the BBC "the transaction complied fully with applicable law". "We anticipate an appropriate resolution to the inquiry," they added. It comes after months of scrutiny over Meta's acquisition of Manus by Chinese regulators. Manus has sought to set itself apart from rival AI developers with what it claims can be a "truly autonomous" agent. Unlike many chatbots which need to be repeatedly asked for things before a user can get their desired response, the company says its service can plan, execute and complete tasks independently in accordance with instructions. Analysts described the deal at the time as a "natural fit" for Meta, with founder and chief executive Mark Zuckerberg spurring the firm's AI development. It recently told staff it would cut thousands of jobs amid increased AI spend. While Manus is now based in Singapore, it was founded and previously based in China and, as such, has come under the country's regulators. China has a number of strict laws and regulations around its tech, including controls on their export or sale to foreign firms. Such regulations, for instance, meant Beijing's approval was needed to secure President Donald Trump's deal to keep TikTok available in the US after its sale by Chinese parent company ByteDance. It was reported in March that Manus' two co-founders had been prevented from leaving the country amid a review of Meta's acquisition. "The outstanding team at Manus is now deeply integrated into Meta, running, improving and growing the Manus service and will continue to make it available to the millions of people who enjoy it," a Meta spokesperson told the BBC at the time. Any requirement to unwind the acquisition may, as a result, cause difficulty for Meta. It also comes amid tensions between the US and China, which have loomed large over the tech industry. The White House said on Friday it would work more closely with US AI firms to combat "industrial-scale campaigns" to steal advances in the technology - saying new information showed "foreign entities, principally based in China" were copying US models. A representative of China's US embassy in Washington DC took issue with "the unjustified suppression of Chinese companies by the US" in response to the memo. "China is not only the world's factory but is also becoming the world's innovation lab," the representative added. Sign up for our Tech Decoded newsletter to follow the world's top tech stories and trends. Outside the UK? Sign up here.

Chinese Billionaire Overhauls AI Startup After Warning on Manus

Chen's decision followed queries from regulators after Meta's acquisition of Manus, and he hopes the separation of MiroMind's Chinese and overseas operations will allow his company to raise capital and manage an international business. The fallout from Meta Platforms Inc.'s controversial acquisition of Manus is prompting one tech founder to erect strict walls between his Chinese and US businesses, calling it a regrettable but necessary template for navigating geopolitical tensions. MiroMind -- founded by Chen Tianqiao, a pioneer of China's online gaming industry -- has implemented protocols to prohibit the cross-border sharing of information or code while minimizing the movement of personnel, data and assets. The decision followed queries from regulators after Meta's $2 billion Manus buyout, the billionaire told Bloomberg News. Beijing on Monday ordered the Manus deal unwound after a months-long probe into potentially illegal tech transfers. More broadly, agencies have moved to restrict US investment into some of the country's highest-profile AI firms without prior approval. Officials had contacted Chen's team in March, he said, cautioning against transferring technology out of the country unilaterally. Chen said the issue was resolved after outlining the envisioned internal firewalls, under which each region's business is handled locally. "Previously, I believed we could bring together Chinese and global talent to contribute to humanity's future. But after the Manus incident, we have had to fully implement firewalls," Chen said in an online interview from his California home last week. "Admittedly, this approach can feel like 'cutting off our own limbs,' but under the current regulatory environment, it is a necessary compromise." Chen's remarks -- made to Bloomberg News before Beijing announced it was blocking the Meta acquisition -- represent the first major acknowledgment from a high-profile industry figure of the aftershocks from the post-Manus scrutiny. The billionaire said on Tuesday he remains intent on his overhaul and hadn't changed his stance since Monday's announcement. Manus's founders got their start in China but relocated their headquarters and key staff to Singapore in 2025. It wasn't clear when the deal was announced in December whether Beijing would exert its authority on a transaction that technically took place beyond its borders. Beyond the Manus probe, the industry faces heightened scrutiny over offshore listings and American capital investment. The pressure risks driving more outward-looking founders to abandon their domestic operations as they chase funding and users in the US and other Western markets. MiroMind's approach may now offer a formula for domestic startups hoping to set up global businesses and avoid the sort of regulatory uncertainty that's engulfed Manus -- a clean separation of a startup's Chinese and overseas operations that Chen hopes will allow his company to raise capital and manage an international business. Representatives for the National Development and Reform Commission and the Commerce Ministry, which are involved in the Manus investigation, didn't respond to faxed requests for comment. Chen has invested $100 million -- part of a $2 billion total commitment from his Shanda Group into so-called "discoverable AI" -- into MiroMind, which employs more than 60 scientists across locations including Singapore, Tokyo, and Seattle. MiroMind will begin its first external fundraising in the second half of this year as it nears meaningful revenue through deals with asset managers and energy infrastructure providers. The startup attracted scrutiny of its own after the departure of key scientist Dai Jifeng, a Tsinghua University professor who formerly worked at SenseTime Group Inc. Dai joined forces with Chen in 2025 through an affiliated company. Dai told the Washington PostBloomberg Terminal MiroMind tried to force him to relocate overseas, triggering his departure. The dispute drew comparisons online to Manus, which decamped to Singapore last summer before the Meta buyout. Chen denied Dai's account, while Dai declined to comment to Bloomberg News queries. At the heart of the post-Manus debate is how the startup restructured to enable a sale to a foreign company prior to any regulatory review in Beijing. While Manus is a Singapore-incorporated firm, its founders originally developed the tech while living in China. In July, Manus relocated its China-based staff to Singapore, cutting dozens of roles in the process. Chen himself was one of the biggest beneficiaries of US capital -- an increasingly difficult path for today's entrepreneurs. Riding an online gaming boom, Shanda raised $152 million in a Nasdaq listing in 2004, making Chen a billionaire at 30. After failing to fend off rivals such as Tencent Holdings Ltd. and Alibaba Group Holding Ltd., Chen took his company private in 2012 and repositioned it as an investment group. He has been living overseas for 16 years, first in Singapore and then California. "The international environment is extremely complex," Chen said. "Under current geopolitical conditions, companies effectively have no choice but to pick a side." -- Haze Fan, Zheping Huang

Meta prepares to unwind its $2 billion Manus acquisition after China's block

Meta is preparing to unwind its approximately $2 billion acquisition of the agentic AI startup Manus after China's National Development and Reform Commission formally ordered the deal's cancellation on Monday, the Wall Street Journal reported, citing people familiar with the matter. Beijing has given Meta and Manus a preliminary deadline of several weeks to reverse the transaction and fully restore Manus's Chinese assets to their original state. Neither Meta nor Manus had publicly confirmed the unwind preparation at the time of publication. The new detail from the Journal is operationally significant. Monday's NDRC cancellation order, established that China had issued a formal prohibition on the deal. Tuesday's reporting establishes that the prohibition carries a concrete compliance deadline and specifies the required outcome: restoration of Manus's Chinese assets to their pre-acquisition state. That is a more specific and more demanding requirement than a simple cancellation order. It implies that some portion of the Manus entity, assets, or operational infrastructure remains legally in China and must be disentangled from Meta's ownership before the deadline expires. What exactly constitutes "Chinese assets" for a company that was incorporated in Singapore and employed primarily Singapore-based founders is a question that lawyers for both Meta and Manus will be spending the next several weeks resolving under Chinese regulatory supervision. The situation in terms of the broader precedent being set. China's decision to press for the unwinding of a completed deal involving a company that had legally relocated to Singapore is "a step unlike anything it's tried before." The NDRC's jurisdiction claim rests on the argument that Manus, despite its Singapore incorporation, retained sufficient connections to China, through its founders, its technical development origins, its data, or its institutional knowledge, to be subject to Chinese foreign investment security review. That claim, if not legally challenged, becomes the template for every subsequent case of a Chinese-founded AI company incorporated abroad seeking to exit to a US acquirer. The absence of a detailed legal rationale is, in itself, a signal: China is asserting the right to block such transactions without creating a public precedent that could be challenged in international arbitration. The NDRC's one-line statement, "prohibit foreign investment in the Manus project in accordance with laws and regulations", is precisely as short as it needs to be to accomplish the result without providing legal handholds for contestation. For Meta, the operational consequences are emerging rapidly. The company paid approximately $2 billion for an agentic AI team and technology it will now be required to return in some form to Chinese regulatory satisfaction. The financial loss is bounded, Meta has $70 billion in cash and can absorb the write-down. The strategic loss is less bound: Meta had positioned Manus as a foundational acquisition for its agentic AI capabilities, which are central to its AI product roadmap for 2026 and 2027. Whether the Manus technology, platform, or team can be reconstituted outside of China's regulatory reach, in Singapore, in the US, or in a structure that satisfies the NDRC's requirements while preserving Meta's access to the capability it paid for, is the question the next several weeks will answer.

Beijing's blunt message to its tech sector

There was little detail in the brusque one-line statement with which China this week retrospectively banned Meta's $2bn acquisition of artificial intelligence app Manus. But the message to Chinese entrepreneurs and early-stage investors was clear: keep your AI technology at home. The team behind Manus developed the AI agent in China, but moved to Singapore in mid-2025 after receiving a major investment from US venture capital firm Benchmark -- a shift that prompted some Chinese online media to call the developers "defectors". The sale in December of the now Singaporean venture to Facebook's US owner Meta was seen by Chinese officials to be "conspiratorial". Beijing has now ordered it to be unwound. The ruling looks likely to chill foreign investment in Chinese tech start-ups, making it harder for their early-stage investors to exit and closing off one route to growth. It is also likely to deter "Singapore-washing", the practice of moving headquarters and operations offshore in order to avoid restrictions on access to markets and technologies imposed on Chinese companies by the US and its allies. Beijing's motivations are clear. US efforts to use such restrictions to maintain tech supremacy have only strengthened China's determination to develop its capabilities in sectors such as AI and semiconductors. Anxiety about the loss of Manus reflects its considerable success in doing so, even if opinions vary on how advanced the app actually is. A desire to hold on to leading companies is understandable, and President Xi Jinping has stressed the need to "strike a balance between openness and security" when it comes to tech, even if the latter is clearly the bigger priority. "We must . . . move faster to achieve greater self-reliance and strength in science and technology," he said in a speech published last year. Still, there will be a cost to both sides from the decoupling of the Chinese and US tech sectors. Beijing is hardly short of capital to fund technology start-ups, but it lacks the skills and experience of US venture capital. Its opaque handling of the Manus-Meta deal also adds to regulatory uncertainty that is a drag on innovation. Travel restrictions imposed on Manus's chief executive Xiao Hong and chief scientist Ji Yichao, who were told in March they could not leave China, smack of a heavy-handed approach that risks discouraging the entrepreneurs on which future success depends. Monday's ruling by China's National Development and Reform Commission also raises questions about the institutions in charge of regulating tech sector links with the rest of the world. The NDRC's traditional role is setting out and coordinating broad economic and development strategy, but it has become increasingly involved in regulatory enforcement in areas such as data, AI and chips. The shift blurs lines of authority with government ministries and agencies. It also contrasts with the commission's stated goal of focusing "primarily on managing macro matters" and minimising "direct government intervention in market activities". Whichever department in Beijing calls the shots, the move against the Meta-Manus deal highlights the growing barriers between the tech sectors of China and the US. As well as making life more difficult for companies and investors, this could further complicate already faltering efforts to work towards global regulation of AI, one of the biggest policy challenges of our time. Given current geopolitics, some degree of tech decoupling was probably inevitable. But any reduction of co-operation between these two great engines of global innovation is regrettable all the same.

Meta pokes holes in China's great AI firewall

NEW YORK, April 27 (Reuters Breakingviews) - Meta Platforms (META.O), opens new tab has exposed a recurring dilemma for China: the country wants its technology champions to go global, but not to leave home. Beijing effectively ordered the social-media goliath to unwind its $2 billion acquisition of artificial intelligence startup Manus, which had relocated to Singapore. It will be a messy ordeal, one that also hammers home a clear message to other local entrepreneurs. Engineers Red Xiao and Ji Yichao officially launched Manus about a year ago under a Chinese parent. The venture attracted attention from Silicon Valley because its agents can handle complex tasks, from booking travel to managing spreadsheets, with minimal human input. Meta said Manus would exit China entirely with no residual ownership there. Reversing the process will be tricky. Manus had ⁠largely extricated itself before Meta boss Mark Zuckerberg came along. After raising $75 million from U.S. venture capital firm Benchmark in May 2025, it closed its China offices, laid off staff and shifted operations to Singapore. Subsequently, Manus employees moved to Meta offices there. Now Beijing is belatedly trying to reassert control. The two co-founders were banned from leaving China during the regulatory review, Reuters reported. Meta's apps, including Facebook and Instagram, don't operate in China, however, limiting the scope of official leverage. Unwinding the deal is also complex. Questions remain over how Meta would recover funds from earlier backers, including Chinese tech giant Tencent (0700.HK), opens new tab, and whether those investments must be reversed under Monday's directive from the National Development and Reform Commission, China's state economic planner. More importantly, once the people, code and intellectual property are integrated, separation becomes ⁠even tougher. The episode underscores the AI tension. Beijing officials appear to have underestimated Manus's strategic value, reacting only after the firm decamped and was then acquired. The fallout is also likely to feature in U.S.-China diplomatic discussions scheduled for next month. However the Meta dispute plays out, the deterrence effort will not be lost on locals. Slipping out of China to pursue international capital and suitors won't be easy. It's a painful time for ⁠such an edict. U.S. AI startups raised nearly $270 billion in the first quarter, more than 13 times as much as their Chinese counterparts, according to a KPMG report, opens new tab. Even as Manus exemplifies its home country's ambitions in cutting-edge technology, it simultaneously showcases the limitations. Follow Karen Kwok on LinkedIn, opens new tab and X, opens new tab. CONTEXT NEWS China on April ⁠27 ordered social media giant Meta Platforms to unwind its December 29 acquisition of artificial intelligence startup Manus, which relocated to Singapore after it was started in Beijing. The National Development and Reform Commission said it would "prohibit foreign investment in Manus in accordance with laws ⁠and regulations, and requires the parties involved to withdraw the acquisition transaction." The state economic planning agency did not name Meta or other overseas investors in Manus. "The transaction complied fully with applicable law," Meta said in a statement to Reuters. "We anticipate an appropriate resolution to the inquiry." Editing by Jeffrey Goldfarb; Production by Maya Nandhini Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Finance Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Karen Kwok Thomson Reuters Karen is a columnist based in New York focusing on global technology and venture capital sectors, writing stories about artificial intelligence, fintech, and semiconductor companies. She used to cover deals in the Middle East region and global metal mining sector. Prior to Breakingviews, she was a European gas and power reporter at S&P Global Platts in London and covered funds and equities at Morningstar UK. Karen also briefly worked at Bloomberg. Born and raised in Hong Kong, she is fluent in Mandarin and Cantonese.

China blocks Meta's acquisition of AI startup Manus

China said Monday it has decided to block Meta's $2 billion acquisition of Manus, a Singaporean AI startup with Chinese roots. China's state planner, the National Development and Reform Commission, said it made the decision to prohibit foreign investment in Manus in accordance with laws and regulations, and has asked the parties involved to withdraw the acquisition transaction. The deal had attracted scrutiny from both China and Washington, as lawmakers in the U.S. have prohibited American investors from backing Chinese AI companies directly. Meanwhile, Beijing has increased efforts to discourage Chinese AI founders from moving business offshore. -- CNBC's Anniek Bao contributed to this story.

China Will Require Meta to Unwind Acquisition of AI Start-Up Manus

The Chinese government said on Monday that it would require Meta's acquisition of Manus, a Singapore-based artificial intelligence company with Chinese founders, to be unwound, in a move that could chill other Chinese entrepreneurs from seeking tie-ups with foreign partners. Chinese officials had said in January they were investigating whether Meta's acquisition of Manus last December violated the country's rules on foreign investment. They were also assessing whether the deal violated China's requirements that companies obtain approval for the export of certain technologies. The National Development and Reform Commission, a high-level ministry that oversees economic planning and plays a central role in setting China's A.I. policy, said on Monday that it had decided to prohibit foreign investment in Manus, and instructed the parties involved to withdraw the acquisition. It is not clear how such a transaction would be unwound. Meta has described the two teams as "deeply integrated." Members of the Manus team have been working alongside colleagues from Meta at the company's office in Singapore, according to two people familiar with the operation who were not authorized to talk publicly. The Chinese government issued its decision just a few weeks before a planned meeting between President Trump and China's leader, Xi Jinping. The New York Times reported last month that officials from the Chinese agency had called in Meta and Manus executives to express concerns about the deal, and that Manus executives had been restricted from departing China, as part of an apparent effort to discourage Chinese A.I. executives from moving businesses offshore. As companies in China and the United States race to develop cutting-edge A.I., the scrutiny could make it harder for other Chinese firms to attract funding from foreign investors. It could also signal to other Chinese researchers not to follow the path Manus took, in which Chinese executives register companies outside China to sidestep regulations from both Washington and Beijing. Manus is based in Singapore but was founded by Chinese engineers and had a Chinese parent company. The company was incorporated offshore and set up in China as a foreign-owned entity; it has affiliated offices in Beijing and Wuhan. Meta did not immediately respond to a request for comment. The company previously said that the transaction had fully complied with applicable law. This is a developing story. Check back for updates. Xinyun Wu contributed research from Taipei.

China blocks Meta from acquiring AI startup Manus

HONG KONG -- China on Monday blocked U.S. tech giant Meta's acquisition of the artificial intelligence startup Manus, in an unexpected move to reverse a deal that apparently aroused Beijing's concerns about the transfer of advanced technology. In a one-line statement, China's National Development and Reform Commission, the country's top planning agency, said it was prohibiting a foreign acquisition of Manus and had required all the parties to withdraw from the deal. It did not specifically name Meta Platforms, which owns Facebook and Instagram. The decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. It came after Chinese authorities said they were looking into the deal earlier this year. The commission did not elaborate on the reasons for the ban. The announcement came less than a month before U.S. President Donald Trump's planned visit to Beijing to meet Chinese leader Xi Jinping in May, in a sign that China's communist leaders are tightening scrutiny of the AI industry amid intensifying geopolitical rivalry with the U.S. over the technology. Meta announced in December that it was acquiring Manus, which has Chinese roots but is based in Singapore, in a rare case of a major U.S. tech group buying an AI company with strong links to China. Its deal with Manus, whose "general-purpose" AI agent can perform multistep complex work autonomously, was expected to help expand AI offerings across Meta's platforms. Meta had said there would be "no continuing Chinese ownership interests in Manus" and that Manus would discontinue its services and operations in China. But China said in January that it would investigate whether the acquisition would be consistent with its laws and regulations. China's commerce ministry said at the time that any enterprises engaging in outward investment, technology exports, data transfers and cross-border acquisitions must comply with Chinese law. Meta had said most of Manus' employees were based in Singapore. Manus did not respond to a request for comment. Its website says the company "is now part of Meta," indicating that the deal had already been completed. Meta said on Monday that the Manus transaction "complied fully with applicable law." "We anticipate an appropriate resolution to the inquiry," the California-based company said in a statement. Singapore-based Butterfly Effect Pte was the firm behind Manus ahead of the acquisition. But the AI startup traces its roots back to Beijing-registered entities which were established several years ago. "China is showing the world that it is willing to play hardball when it comes to AI talents and capabilities, which the country views as a core national security asset," said Lian Jye Su, chief analyst at the technology research and advisory group Omdia. "It is strongly indicative of what Chinese authorities may do going forward regarding acquisitions involving Chinese deep-tech companies." Beijing's acquisition ban could deter similar acquisition plans by U.S. tech giants going forward, he said. "In the context of rivalry, it mirrors U.S. export controls, entity lists, and investment curbs on China," said Su.

China orders Meta to unwind its $2 billion acquisition of Manus

The NDRC's Office of the Working Mechanism for Foreign Investment Security Review issued a formal cancellation order on Monday, four months after the deal was announced. Manus co-founders Xiao Hong and Ji Yichao have been barred from leaving China since March. China's National Development and Reform Commission has formally ordered Meta to unwind its $2 billion acquisition of Manus, the agentic AI startup, in a brief statement issued by the Office of the Working Mechanism for Foreign Investment Security Review on Monday. The NDRC's instruction represents the end of a four-month regulatory process that began almost immediately after the deal was announced in December 2025, escalated to exit bans on Manus's co-founders in March 2026, and has now concluded with China's most direct intervention in a US technology acquisition of a Chinese-founded company since the beginning of the current trade war cycle. Manus was founded by Xiao Hong (CEO) and Ji Yichao (Chief Scientist) in China and incorporated in Singapore, a common structure for Chinese AI startups seeking international investment while maintaining operational roots in China. The company emerged in early 2025 as one of the most technically impressive agentic AI platforms, capable of autonomously executing complex multi-step tasks across web browsers, code editors, and file systems without requiring human supervision at each step. It raised $75 million from Benchmark, the prominent US venture capital firm, in April 2025, and was acquired by Meta in a deal the Wall Street Journal reported as valued at over $2 billion. Meta announced there would be no continuing Chinese ownership interest post-close and that Manus would discontinue services and operations in China. The Chinese government's concern was not about the $2 billion price or Meta's market position in China, Meta's consumer apps are already blocked in the country. The concern was about what category of asset was being transferred. China's Ministry of Commerce launched a formal probe in January 2026, framing its review around export control laws and what constitutes a technology export when the asset being transferred is not a conventional product but a team, a system, and operational know-how embedded in a Chinese-founded and Chinese-trained organisation. That framing, "is an AI team an export?", is the regulatory question the Manus case has forced into the open, and it has no settled answer in any jurisdiction. Chinese authorities had barred Xiao Hong and Ji Yichao from leaving the country after summoning them to Beijing for questioning by the NDRC on potential violations of foreign direct investment rules. The pair, based in Singapore, were told they could not leave China after attending those meetings. The Washington Post reported last week that the Manus case had revealed what Chinese tech workers described as "a new red line": the point at which a Chinese-founded, Singapore-incorporated AI company becomes subject to Chinese state oversight over its ability to exit to a US acquirer. That red line, now formalised by Monday's cancellation order, has direct implications for any Chinese-founded AI startup incorporated outside China that is considering a similar international exit. The Manus case is also the direct origin of the broader Chinese policy, which is to require government approval before Chinese tech companies accept US capital, and the multi-agency probe, led by the NDRC and including the Ministry of Commerce, that was triggered by the Meta-Manus deal. That policy, reported as unverified by Reuters when it was announced on Thursday, has now received its first concrete enforcement action in the form of Monday's cancellation order. The Meta-Manus case is no longer just a data point in the US-China AI competition; it is the foundational event that has prompted China to formalise a new regulatory framework for technology outflows at the intersection of AI, foreign investment, and national security. For Meta, the practical consequences are significant but bounded. The company paid $2 billion for a team and technology it will now, at least formally, not be able to integrate, or will be required to unwind to Chinese regulatory satisfaction. Whether Meta can recover any portion of its acquisition consideration, retain any of the Manus team outside China, or argue that the Singapore incorporation insulates the deal from NDRC jurisdiction are all questions that will be resolved through legal proceedings rather than press releases. The broader consequence is strategic: any US technology company considering acquiring a Chinese-founded AI startup must now treat NDRC foreign investment security review as a genuine deal risk, regardless of where that company is incorporated.

Xi Tests China's Reach by Blocking Meta Deal That's Already Done

China has sought for years to exert influence over business deals beyond its home turf. Still, its decision to press Meta Platforms Inc. to unwind a $2 billion acquisition of AI startup Manus marks a step unlike anything it's tried before. The country's powerful state planner decreed Monday that the deal must be canceled -- four months after it was sealed. In doing so, it's targeting a US tech juggernaut with little to no business operations in China and a startup that, while originally from China, had legally moved to Singapore. The two companies have spent months operating on the assumption that the deal was wrapped up. The startup's employees have already moved into Meta offices in Singapore, while its executives have joined the US firm's high-profile AI team. Investors in Manus, including Tencent Holdings Ltd., ZhenFund and HongShan, have already received their payouts, according to people familiar with the matter. One big question will be whether Beijing has the power to force the Manus deal's reversal -- and, if so, how. Meta quickly responded on Monday to the National Development and Reform Commission's terse announcement by saying it had complied with applicable laws and hoped for an "appropriate resolution," without elaborating. "The Manus incident shows the challenges of regulating Chinese-origin capital, talent and intellectual property once they go offshore," said Stefanie Kam, assistant professor at the China Programme, Institute of Defense and Strategic Studies, Nanyang Technological University, Singapore. "The policy significance lies in the uncertainty the case exposes: What actually moves offshore when an AI company moves offshore?" China's regulators have long wielded power far beyond their counterparts in most other countries. They cracked down on Alibaba Group Holding Ltd. co-founder Jack Ma and forced the company's finance arm, Ant Group Co., to pull its initial public offering just days ahead of a planned listing in 2020. In one case with parallels to the Manus situation, Beijing forced Didi Global Inc. to unwind its 2021 IPO on the New York Stock Exchange because of regulatory concerns. The leading ride-hailing provider had to delist in the US and hasn't been able to float its shares on another exchange since. Its market valuation is about $17 billion. That Beijing is pressing Meta to reverse course on the Manus deal speaks to the depth of its concerns over the deal -- and more broadly its control over development of AI by startups across the country. Domestic critics have argued the sale robbed China of valuable AI technology and handed it over to the country's biggest geopolitical rival. Still, it's not clear whether the deal can be reversed in any meaningful way. The startup has already shared its code with Meta, and it's been incorporated into the US company's services, one of the people said. Forcing Manus' founders and investors to return money to Meta risks accomplishing little beyond giving the American company access to critical technology for free. "The Manus decision is largely symbolic -- unwinding the deal is impractical at this point since capital and technology transfers were complete," said Laila Khawaja, research director of Gavekal Technologies. The Chinese government has little leverage over Meta. Its primary services, including Facebook and Instagram, are banned in the country already. "Beijing's remaining leverage lies in controlling the cross-border movement of Manus executives and potentially forcing their resignations from Meta," Khawaja said. Beijing had already begun to tighten scrutiny of other tech firms in the wake of the Manus deal. In recent weeks, the NDRC and other agencies have told key AI startups, including Moonshot AI and Stepfun, they should reject capital from US investors unless explicitly approved, Bloomberg News reported last week. Regulators have also decided on similar restrictions for ByteDance Ltd., which owns TikTok and is the most valuable startup in the country. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Plus Signed UpPlus Sign UpPlus Sign Up By continuing, I agree to the Privacy Policy and Terms of Service. The Manus decision is the first time authorities have publicly announced a verdict using a 15-year-old foreign investment review mechanism, according to Liu Xu, a research fellow at the National Strategy Institute of Tsinghua University. It's impossible to determine the impact on other M&A transactions involving foreign entities, but it's clear now that deals related to advanced technologies are subject to close scrutiny, Liu said. If a foreign acquisition targets Chinese companies in high-tech sectors such as AI, or firms with high valuations, those cases could come under strict security review, he said. "Also under a spotlight are deals that could result in loss of control over key patents, or technologies falling into foreign hands," he said. The Manus decision comes just weeks before US President Donald Trump and China's Xi Jinping are scheduled to meet at a high-profile summit, where the two leaders are expected to discuss investments, access to technology, artificial intelligence and trade. It's not clear whether Meta's acquisition is critical enough to the US administration to become part of the talks. Meta cut the deal for Manus as part of its effort to catch up with rivals such as Alphabet Inc.'s Google, OpenAI and Anthropic PBC. Manus was supposed to help Meta leapfrog into a leading position in the hot sphere of AI agents, or services that use artificial intelligence to execute tasks. AI agents are self-directed, self-driven systems that can carry out tasks such as drafting research notes, analyzing stocks and planning entire travel schedules -- without humans controlling the actions. They are now seen as key to making AI productive -- as well as revenue-generating. Meta has been plowing billions into fine-tuning its AI agent arsenal. The real impact of the NDRC decision may not be on Manus, but on other tech entrepreneurs in China. Many Chinese tech firms have either shifted their bases to Singapore or considered such a move as they seek to expand internationally, raise capital, recruit global staff and loosen the oversight of Communist Party regulators. "This move serves as a stark warning to other Chinese startups and talents considering the "de-Chinaing" template to access overseas capital and markets," said Khawaja of Gavekal Technologies. "Beijing supports global expansion but wants to closely monitor such moves to prevent talent loss and technology leakage -- a new challenge as China ascends in various technology sectors."

China blocks Meta's acquisition of Manus AI

Why it matters: It's an escalation of AI tensions between Beijing and D.C. * It also signals an end to "Singapore washing," a corporate sleight of hand that's helped several Chinese tech companies secure foreign investment and commercial contracts. Catch up quick: Manus was domiciled in the Cayman Islands, but was otherwise a Chinese company when U.S. venture firm Benchmark led its $75 million Series B round last spring. * That investment sparked a Treasury Department investigation to determine if it violated outbound investment laws. * Benchmark is said to have invested with the understanding that the startup's 100 or so China employees would move south to Singapore, which they quickly did. * Meta acquired the company late last year, with China soon opening an investigation. What they're saying: In a statement provided to Axios, Meta suggests that the matter isn't yet settled: * "The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry." The bottom line: It's unclear how or if Meta could unscramble the egg.

China blocks $2bn Meta takeover of AI agent developer Manus

Beijing says domestic tech companies must seek explicit government approval for accepting US investment China has blocked Meta's $2bn (£1.5bn) acquisition of an AI startup as it cracks down on US investments in domestic tech companies. Mark Zuckerberg's Meta, the owner of Facebook, Instagram and WhatsApp, announced the acquisition of Manus, a developer of autonomous AI agents, in December. However, the Chinese National Development and Reform Commission (NDRC) said on Monday it had cancelled the takeover. In a statement, China's top economic planning body said that it will "prohibit the foreign investment in the acquisition of the Manus project" and "requires the parties involved to withdraw the acquisition transaction". Bloomberg reported last week that Chinese regulators are planning to block tech firms, including leading AI startups, from accepting US investment without government approval. Several private firms have reportedly been warned in recent weeks that they should reject US funding unless it receives explicit approval from Beijing, in a policy move triggered by the Manus deal. Manus, which launched in Beijing but is now based in Singapore, described the deal as "validation of our pioneering work with general AI agents". AI agents are designed to carry out multiple tasks - such as planning holidays, handling customer queries or drafting research presentations - without human intervention and are important products for tech executives touting the labour-saving possibilities of the technology. Meta, which is pouring billions of dollars into its AI drive, said the deal would bring a "leading agent to billions of people and unlock opportunities for businesses across our products". China and the US are the leading AI superpowers, with all of the top 20 best-performing models produced by a developer from one of those countries. The US president, Donald Trump, claimed in January that "we're leading China by a tremendous amount" in what the White House has billed as a straight race between Beijing and Washington for AI dominance.

China blocks Meta's $2bn purchase of Manus

China has blocked Meta's $2bn acquisition of artificial intelligence platform Manus, after regulators reviewed whether the deal violated Beijing's investment rules. Chinese regulators said in a statement on Monday they had told the parties involved to cancel the acquisition. Manus was founded in China but last year moved its headquarters and core team to Singapore and was subsequently bought by Meta. Since then Chinese regulators have mobilised across multiple agencies to review the transaction, drawing in bodies including the National Development and Reform Commission, the commerce ministry and China's antitrust watchdog, the FT reported this month. Officials had been examining the deal using a range of tools, from export control rules to foreign investment and competition laws, the people said. In March, Beijing restricted two co-founders of Manus from leaving the country as the deal was reviewed. Meta did not immediately respond to a request for comment. This is a developing story

China's decision to block the $2 billion Meta-Manus deal shows how far Washington and Beijing are drifting apart over AI | Fortune

China has blocked Meta's deal to acquire AI startup Manus. The National Development and Reform Commission, the country's top macroeconomic regulator, unceremoniously posted on Monday that it had "decided to block the foreign acquisition of the Manus project and require the parties to unwind the deal." The move is a headache for Meta, for whom the Manus acquisition, reportedly valued at around $2 billion, was a key element of its new AI strategy. It's also not clear how Meta can "unwind" the deal: Manus employees had already joined Meta's AI team, and backers like Tencent and Hongshan Capital had already received their cut of the deal, according to a report from Bloomberg. The blocked deal also shows how quickly the U.S. and Chinese AI ecosystems are decoupling, as both Washington and Beijing now seek to maintain control of strategic technologies and prevent them from leaking to the other. "The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry," a Meta spokesperson said in a statement. Investors shrugged off the news, with Meta shares up 0.5% in Monday trading. Manus first grabbed the global spotlight in early 2025 when, in the wake of DeepSeek's shock to global markets, its parent company -- then called "Butterfly Effect" -- unveiled an AI agent that its founders promised was "truly autonomous." Then, in July 2025, the company announced that it had moved its office from Beijing in China, where it was founded, to Singapore, a popular destination among Chinese companies trying to distance themselves from their country of origin. Then, six months later in December, Meta announced its acquisition of Manus, and said the startup would shut down its operations in China. Chinese authorities quickly said they would review the deal, noting that the startup still relied on Chinese talent and technology. The Chinese government has also barred the two Manus cofounders from leaving China, according to the Financial Times. Beijing routinely bars people subject to potential investigations from leaving the country. Several other Chinese companies have tried to establish themselves in Singapore in response to regulatory scrutiny, either from Beijing or Washington. TikTok set up its international headquarters in the Southeast Asian country as it battled threats of a U.S. ban, and fast fashion platform Shein established itself as a Singaporean company as it prepared for a New York IPO. Neither strategy worked: TikTok still had to deal with a ban in the U.S., and Shein has yet to IPO in any jurisdiction, let alone New York. Manus could have also switched its headquarters to Singapore in response to U.S. regulatory scrutiny. U.S. rules largely bar investment into China's AI sector. Semafor reported last year that the U.S. Treasury Department was probing a pre-switch Manus funding found that included Silicon Valley firm Benchmark. In addition, becoming a Singaporean company could have helped Manus access advanced AI processors from companies like Nvidia, which are currently subject to U.S. export controls. Beijing has built up an array of legal tools to put pressure on foreign companies, developed in response to American sanctions, export controls and investment bans. (Washington has routinely blocked Chinese investment and acquisitions of U.S. companies) Chinese officials have previously probed deals involving Intel and Nvidia on antitrust grounds. China has also steadily expanded its own use of export controls, particularly regarding rare earth minerals. While Manus itself may not have been particularly strategic, Beijing may have felt it needed to take action to oppose the acquisition given the company's very clear effort at "Singapore-washing." Officials have smacked down other companies that criticized or ignored Beijing's regulatory scrutiny. In 2020, officials derailed the IPO of Ant Group, Alibaba's finch affiliate, after founder Jack Ma criticized China's regulatory approach in a public keynote. Then, the following year, Chinese officials announced a data privacy probe of ride-hailing firm Didi just days after its New York IPO, forcing the company to eventually delist. (Together, these two actions sparked a years-long chill in China's tech sector -- a chill that DeepSeek and, ironically, Manus helped to end.) These problems could get trickier in the future. Bloomberg reported before the weekend that Beijing is considering rules that would require Chinese AI companies to get approval before seeking U.S. investment in funding rounds. The report added that both Moonshot AI, the developer of the large language model Kimi, and ByteDance received warnings. China's move puts the country's AI founders in a bind. If they stay in China, they deny themselves access to U.S. funding and computer chips. But if they redomicile overseas, they invite scrutiny from Beijing if they tap public markets or seek an acquisition. Founders may end up setting up overseas from the get go, whether somewhere like Singapore or in the U.S.. The NRDC's order also closes off another avenue for U.S.-China engagement over AI, which has proved unable to resist the effect of geopolitics. Even academic research isn't safe. In late March, NeurIPS, considered the premier conference for AI research, briefly banned submissions from Chinese companies under U.S. sanctions, citing legal advice that accepting such research could violate U.S. law. Chinese organizations reacted angrily to the move, calling for a boycott. NeurIPS quickly backtracked, blaming a miscommunication with its legal team. More recently, several U.S. politicians and venture capitalists have criticized Senator Bernie Sanders's decision to host an discussion with both U.S. and Chinese experts about "the need for international cooperation" regarding the "existential threat" of uncontrolled AI. Even the prospect of talking to Chinese AI experts -- and accepting that there's a non-U.S. view on things -- was too much for some. "It would be like channeling Hugo Chavez to get advice on how to run our economy," U.S. Treasury Secreary Scott Bessent wrote in a post on X. "The real threat to AI safety is letting any nation other than the United States set the global standard."

China Blocks Meta's $2 Billion Acquisition of AI Startup Manus - Decrypt

Manus co-founders were barred from leaving China during the regulatory review. China's National Development and Reform Commission ordered Meta to unwind its acquisition of Chinese AI startup Manus, with regulators requiring both parties to reverse the transaction. The commission stated it will "prohibit foreign investment in Manus in accordance with laws and regulations, and requires the parties involved to withdraw the acquisition transaction." Meta had announced the acquisition in late December 2025 for an estimated $2 billion. Within weeks, China's commerce ministry launched an investigation in January 2026. By March 2026, the scrutiny intensified. Manus co-founders Xiao Hong and Ji Yichao were summoned to Beijing for regulatory meetings and subsequently barred from leaving the country, according to Reuters. The startup had already begun unwinding operations months earlier, closing its China offices and laying off dozens of employees in July 2025. Manus develops what it calls "truly autonomous" AI agents capable of planning and executing tasks independently. The company relocated from China to Singapore around mid-2025, according to TechCrunch, though the move didn't stop Chinese regulators from issuing the veto on Monday. The startup's growth trajectory attracted significant investor attention. Manus completed a $75 million funding round led by Benchmark in May 2025 and reached $100 million in annual recurring revenue by December 2025, just eight months after launching. The National Development and Reform Commission's involvement -- as the ministry overseeing economic planning and AI policy -- underscores the strategic importance Beijing places on artificial intelligence assets. Around 100 Manus employees had already moved into Meta's Singapore offices in March 2026, TechCrunch reported. Meta's acquisition of Manus is part of a larger push by the social media giant -- the parent company behind Facebook and Instagram -- to massively grow its AI ambitions and try to catch up to giants like OpenAI, Anthropic, and Google.

How China block of AI deal could stop 'Singapore-washing'

Tokyo (AFP) - When is a Chinese AI startup not a Chinese AI startup? When it's based in Singapore, or elsewhere, to distance itself legally and politically from Beijing. The practice known as "Singapore-washing" is under scrutiny after China blocked a major US acquisition on national security grounds. China's top economic planning body said Monday it prohibited the deal between Facebook owner Meta and the Chinese-developed, Singapore-based artificial intelligence agent tool Manus. That came after a report said two Manus co-founders were prevented from leaving China during a review of the deal. Here, AFP examines what that means: What is Singapore-washing? Firms move abroad "who seek a combination of funding overseas, a laxer regulatory environment, or to appeal to a global customer base without an explicitly Chinese image", said Wendy Chang at the Mercator Institute for China Studies (MERICS). "Beijing has heretofore tolerated this practice, but the Manus case marks a major turning point" as the US-China AI race heats up, she told AFP. The move signals "to its own tech leaders, more than to anybody else, that attempts to bypass national regulation will not be tolerated". Other Chinese tech companies in the Southeast Asian city-state include e-commerce giant Shein, and TikTok -- a subsidiary of ByteDance, which is still based in China. Manus shifted operations to Singapore last year, but "it's unclear whether it has moved the official registration as well, which may give Beijing more leverage", Chang said. AFP has approached Singaporean authorities for comment. Can the deal be undone? Meta and Manus announced the acquisition, reportedly worth around US$2 billion, in December. Meta said Monday that "the transaction complied fully with applicable law", and "we anticipate an appropriate resolution". The Wall Street Journal later reported, citing people familiar with the matter, that the US giant was preparing to backtrack on its acquisition after the Chinese edict. "It may be challenging or even impossible to ultimately reverse this transaction," said Nicholas Cook, a partner at law firm Nixon Peabody CWL. But for Chinese regulators, "no matter the exact deal structure, sensitive AI technology seen as vital to China's national interests... has found its way into the hands of a major US tech actor". "How much the Manus deal can actually be unwound is, in my view, a secondary issue," Angela Zhang, a law professor at the University of Southern California, told AFP. She said China's objective "is to set a precedent and to remind entrepreneurs that they should not transfer critical and sensitive technical know-how overseas without government approval". What's at stake? China wants to prevent leakage of "talent, tech data, capital", said Dylan Loh at Singapore's Nanyang Technological University. The country's AI engineers are a key asset, added Chang at MERICS. "The Meta deal was an 'acquihire', as much about absorbing the talent behind the startup as its technology," she explained. Other analysts said the matter could be a bargaining chip between Chinese President Xi Jinping and US counterpart Donald Trump at upcoming talks. The deal may also have woken Beijing up to the possibility that other companies -- including top AI startup DeepSeek -- could also one day set up shop overseas. What next for other firms? Cook warned that Chinese AI founders "would be well advised to think twice before following in Manus' footsteps". The Financial Times last month said Beijing had restricted two Manus co-founders from leaving China while the review was underway. For Chinese companies using other countries to reach international markets, "this case shows Beijing is not accepting your corporate identity at face value", said Lizzi Lee at the Asia Society Policy Institute. "So if your tech, founders, or talent base are Chinese, then the company is still strategically Chinese, regardless of where it's incorporated," she told AFP. Founders now have a fundamental choice, she said: stay within China and scale domestically, or genuinely relocate even sooner.

China blocks Meta from buying AI startup Manus

Manus catapulted onto the tech sphere when it unveiled what it called the "world's first fully autonomous AI". China has blocked Meta's acquisition of the artificial intelligence startup Manus, in an unexpected move to reverse a deal that apparently aroused Beijing's concerns about the transfer of advanced technology. China's National Development and Reform Commission, the country's top planning agency, said on Monday it was prohibiting a foreign acquisition of Manus and had required all the parties to withdraw from the deal. It did not specifically name Meta Platforms, which owns Facebook and Instagram. The decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. It came after Chinese authorities said they were looking into the deal earlier this year. The commission did not elaborate on the reasons for the ban. The announcement came less than a month before US President Donald Trump's planned visit to Beijing to meet Chinese leader Xi Jinping in May, in a sign that China's communist leaders are tightening scrutiny of the AI industry amid intensifying geopolitical rivalry with the US over the technology. Meta announced in December that it was acquiring Manus, which has Chinese roots but is based in Singapore. Manus catapulted onto the tech sphere when it unveiled what it called the "world's first fully autonomous AI". Meta's deal with Manus, whose "general-purpose" AI agent can perform multistep complex work autonomously, was expected to help expand AI offerings across Meta's platforms. The company was dubbed as China's next DeepSeek and said its AI agent could buy property, program video games, analyse stocks, and plan travel itineraries. Meta had said there would be "no continuing Chinese ownership interests in Manus" and that Manus would discontinue its services and operations in China. But China said in January that it would investigate whether the acquisition would be consistent with its laws and regulations. Last month, the chief executive of Manus Xiao Hong and chief scientist Ji Yichao were told they could not leave China while regulators review the acquisition, the Financial Times reported. China's commerce ministry said at the time that any enterprises engaging in outward investment, technology exports, data transfers and cross-border acquisitions must comply with Chinese law. Meta had said most of Manus' employees were based in Singapore. Manus did not respond to a request for comment. Its website says the company "is now part of Meta," indicating that the deal had already been completed. Meta said on Monday that the Manus transaction "complied fully with applicable law." "We anticipate an appropriate resolution to the inquiry," the California-based company said in a statement. "China is showing the world that it is willing to play hardball when it comes to AI talents and capabilities, which the country views as a core national security asset," said Lian Jye Su, chief analyst at the technology research and advisory group Omdia. "It is strongly indicative of what Chinese authorities may do going forward regarding acquisitions involving Chinese deep-tech companies." Beijing's acquisition ban could deter similar acquisition plans by US tech giants going forward, he said. "In the context of rivalry, it mirrors US export controls, entity lists, and investment curbs on China," said Su.

China blocks Meta's acquisition of AI startup Manus

In a one-line statement, China's National Development and Reform Commission, the country's top planning agency, said it was prohibiting the foreign acquisition of Manus and had required all the parties to withdraw from the deal. It did not specifically name Meta Platforms, which owns Facebook and Instagram. Manus, which has Chinese roots but is based in Singapore, provides a general-purpose AI agent that can autonomously carry out sophisticated tasks like coding an app, doing market research or preparing quarterly budgets. The decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. It came after Chinese authorities said they were looking into the deal earlier this year.

China blocks Meta's acquisition of AI agent developer Manus - SiliconANGLE

The Chinese government today ordered Meta Platforms Inc. to scrap its acquisition of artificial intelligence startup Manus. The development comes about 5 months after the Facebook parent announced the deal. The transaction was reportedly valued between $2 billion and $3 billion. Manus develops an AI agent that can turn financial datasets into presentations, generate websites and perform other multi-step tasks. A Chrome extension enables it to interact with webpages. Under the hood, the agent is powered by large language models from external providers such as Anthropic PBC. Manus is the brainchild of a startup called Butterfly Effect that was founded in China about 4 years ago. The company released Manus last March and raised a $75 million funding round a few weeks later. Around the same time, the Manus team moved from China to Singapore. Manus quickly took off after its release. When Meta announced the acquisition in December, Butterfly Effect disclosed that its annualized recurring revenue from the AI agent had topped $100 million. The company also claimed it had millions of users. Manus drew not only broad consumer interest but also regulatory scrutiny. Last May, the U.S. Treasury Department started looking into whether the $75 million funding round that Manus had closed a few weeks earlier breached financial regulations. The investment was led by San Francisco-based venture capital firm Benchmark. This past January, Chinese regulators launched an investigation into Meta's acquisition of Manus. The review reportedly focused on whether the deal complied with export controls and overseas investment rules. It's unclear how today's regulatory decision will affect Meta's AI development roadmap. Last December, the company stated that it was planning to integrate Manus into its products. However, Meta doesn't yet offer any services that can perform the kind of multi-step tasks Manus is designed to automate. At the same time, the Facebook parent has already started integrating AI agents into its product portfolio. The most prominent example is the Contemplating mode of Muse Spark, Meta's newest LLM. When the feature is enabled, the model uses a collection of research subagents to answer user questions. The Manus acquisition is one of at least a half dozen startup deals that Meta has inked in the past year. In March, the company bought the developer of Moltbook, a social network built for AI agents. A few days later, Meta hired the employees of consumer AI provider Dreamer. The startup developed a platform that enables users to create custom agents without writing code.

China blocks Meta's $2bn Manus acquisition

'The transaction complied fully with applicable law,' Meta said in a statement. China has blocked Meta's $2bn acquisition of AI start-up Manus. In a brief statement, the country's National Development and Reform Commission (NDRC) said that the decision to prohibit foreign investment in Manus was made in accordance with Chinese laws. It has asked the parties to withdraw from the acquisition. In a statement to SiliconRepublic.com, a spokesperson for Meta said: "The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry." Meta did not confirm whether it would push back against the decision. China's decision hinders Meta's massive AI plans to play catch up with its Big Tech competitors. The company has spent billions to acquire businesses, hire expensive executives and realign its priorities. Last week, the Facebook-owner decided to cut 8,000 jobs in a bid to run "more efficiently" and "offset the other investments" it's making. The company, which has budgeted $135bn in spending this year, committed to purchasing Manus late last year, followed by the viral Moltbook platform in March for an undisclosed amount. Manus employees and executives have joined Meta, while investors including Tencent Holdings, ZhenFund and Hongshan have already received their proceeds from the acquisition, sources have told Bloomberg. A person familiar with the matter told the Financial Times that the NDRC's decision was "harsh", and that it carries a "strong intention to stop follow-on deals" similar to Manus. "In reality, it's hard to unwind a done deal, so it is more about verbal warnings on similar deals and the leveraging building before the Xi-Trump summit," the source added. US president Donald Trump is set to meet with his Chinese counterpart Xi Jinping next month. Manus is headquartered in Singapore, but has a Chinese parent company called Butterfly Effect Technology. Meta acquired the company after a $75m funding round last April that valued it at $500m. As per the now contested acquisition deal, Meta can operate and sell the Manus service, as well as integrate it into its own products. However, Manus would still be able to sell its subscriptions through its own app and website. In February, the start-up launched 'Manus Agents', personal AI agents that perform similarly to the Austrian-made open source OpenClaw. The Agents, which debuted on Telegram that month, had expanded to WhatsApp shortly after. Meta did not confirm if the China's decision would affect Manus Agents on WhatsApp. The Chinese Ministry of Commerce launched an investigation shortly following the acquisition to determine whether Meta violated the country's laws on technology exports and outbound investment. According to the rules, the Chinese government needs to approve the export of certain technologies, including AI. While Bloomberg recently reported that Chinese agencies told the country's key AI firms that they should reject capital with US origins unless explicitly approved. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

China blocks Meta's acquisition of AI firm Manus

Beijing (AFP) - China has blocked Meta's acquisition of AI startup Manus, the top economic planning body said Monday, after a regulatory review that reportedly also saw Beijing restrict two co-founders from leaving the country. Facebook owner Meta had agreed to acquire Manus, an artificial intelligence agent created by a company founded in China but now based in Singapore, the two firms said in December. Analysts however had warned then the deal could fall foul of regulators at a time of fierce technological rivalry between Washington and Beijing. The Financial Times reported last month that China had restricted two Manus co-founders from leaving the country, citing three people with knowledge of the matter. Chief executive Xiao Hong and chief scientist Ji Yichao, who are usually based in Singapore, were reportedly summoned to a meeting in Beijing in March and told they were not allowed to leave China because of a regulatory review of the Meta acquisition. Beijing's National Development and Reform Commission said in a statement on Monday that it will "prohibit the foreign investment in the acquisition of the Manus project" and "requires the parties involved to withdraw the acquisition transaction", without naming Meta. It added that this was done "in accordance with laws and regulations". AFP has contacted Manus and Meta for comment. Meta said in December that the deal -- the financial details of which were not disclosed -- would "bring a leading agent to billions of people and unlock opportunities for businesses across our products". Bloomberg Intelligence analysts said the purchase was likely aimed at expanding Meta's AI agent task capabilities, and that it could be worth more than $2 billion. Manus, created by startup Butterfly Effect, can sift through and summarise resumes or create a stock analysis website, according to its website.

Meta's New Acquisition Deal Gets Blocked By Chinese Government

Not so fast. Meta Platforms' recent $2 million acquisition of AI start-up Manus is being blocked by the Chinese government. Founded by CEO Xiao Hong and Chief Scientist Ji Yichao in China and incorporated in Singapore, Manus signed an acquisition deal with Meta back in late 2025. The tech giant is looking to accelerate and develop the startup's AI agents. On Monday, the National Development and Reform Commission, China's state planner, demanded an unwind of the transaction between companies, citing national security concerns. The Chinese Government stated it would prohibit a foreign acquisition of Manus but did not specifically name Meta Platforms. A Meta spokesperson told CNN that the transaction "complied fully with applicable law," and that it will expect an "appropriate resolution." According to a report from the Financial Times, Beijing had banned the co-founders of Manus from leaving the country as it carried out an investigation. US President Donald Trump and Chinese leader Xi Jinping are set to meet in Beijing next month discuss key issues several key issues, like trade and technology controls.

Meta Thought It Had a $2 Billion Deal for AI Startup Manus -- Then China Said No

Meta and Manus were ready to stroll down the aisle together, but with the stroke of a pen, China ruined their wedding. China's National Development and Reform Commission ordered Meta and Manus to unwind their $2 billion acquisition in a brief statement Monday. The decision came after Beijing launched a probe into whether the deal violated export controls and technology transfer laws. Manus, a Singaporean AI startup with Chinese roots, develops general-purpose AI agents that can execute complex tasks like market research, coding and data analysis. The company hit $100 million in annual recurring revenue just eight months after launching its product. The deal raised red flags on both sides of the Pacific. Congress has blocked American investors from directly backing Chinese AI companies, while China has tried to prevent Chinese AI founders from moving their businesses offshore. Manus relocated from China to Singapore before Meta announced the acquisition in December. China's decision to block the deal alarmed tech founders and venture capitalists who were hoping to use the so-called "Singapore-washing" model to avoid meddling by both Beijing and Washington.

China's Meta backlash renders Manus model 'officially dead'

Beijing's order for Meta to unwind its $2 billion takeover of AI startup Manus signals a new era of regulatory scrutiny for China's tech industry. The move highlights Beijing's determination to prevent sensitive technology transfer to geopolitical rivals, forcing entrepreneurs and investors to re-evaluate global expansion strategies and corporate structures. The AI startup Manus, once hailed as a breakthrough that would challenge Silicon Valley's dominance, is turning into a cautionary tale for Chinese entrepreneurs after Beijing authorities ordered Meta Platforms to unwind its $2 billion takeover of the company. With a chilling 54-character decree from the top state planner, Beijing demonstrated its determination to prevent the transfer of sensitive technology to geopolitical foes at all costs. That follows a recent decision to bar major tech firms including ByteDance Ltd. and Moonshot AI from taking American capital without approval, and a clampdown on offshore Chinese companies seeking to list in Hong Kong. Taken together, the regulatory setbacks usher in an uncertain era for the country's rapidly expanding AI industry, spurring a raft of activity behind the scenes. Entrepreneurs, financiers and companies are scrambling to avoid becoming another Manus, whose Chinese founders moved their business to Singapore to tap global capital. Firms are reviewing investment portfolios, overhauling ownership structures and even erecting firewalls between Chinese and American units. "As of today, 'the Manus Model' is officially dead," said Dermot McGrath, founder of ZenGen Labs, a Shanghai-based consultancy that advises tech startups about their business. "Chinese teams have punched well above their weight in AI and produced a string of unicorns, and policymakers saw the Manus maneuver as a template that could threaten the crown jewels of their innovation ecosystem in the defining technology of the decade." Beijing was particularly irked by the speed at which Meta wrapped up the transaction as well as the loss of pioneering agentic AI to one of Silicon Valley's most valuable companies. The backlash against Manus -- which comes weeks before China's Xi Jinping is due to meet US President Donald Trump -- underscores Beijing's overarching ambition to surpass the US in technological and economic might. (Meta representatives declined to comment). Chinese AI aspirants once viewed Manus as a blueprint for global success: a viral outfit created by a trio of local entrepreneurs who made a big splash in the US before the Meta buyout. But even as startups like DeepSeek draw massive interest from domestic investors, the admiration for Manus is quickly souring as founders and venture investors grapple with fundamental resets to their funding and corporate structures following intensifying regulatory pressure. Startups that dreamed of following MiniMax Group Inc. and Zhipu to Hong Kong listings are now seeking advice from their venture backers to avoid getting stuck in IPO limbo, people familiar with the matter said. At least three investment houses are in discussions with their founders about whether to dismantle their offshore entities: the so-called red-chips once deemed a key step toward a debut. That's as regulators recently instructed some AI and robotics firms -- including DeepSeek-rival StepFun -- to unwind those structures in order to qualify for a listing in the city, they said, asking for anonymity to discuss private matters. Global react: China's AI warning on Meta, Manus For firms with operations in both China and the US, the Manus fallout represents an even greater threat. Chinese billionaire Chen Tianqiao, a pioneer of China's online gaming industry, told Bloomberg News that he's rolled out protocols to prohibit the cross-border sharing of information or code while minimizing the movement of personnel, data and assets. "The Manus incident serves as a wake-up call for all cross-border entrepreneurs," Chen told Bloomberg News after Beijing ordered the Manus deal rolled back. "As regulatory environments across regions become increasingly complex, both founding teams and external partners -- including advisors and law firms -- must adopt a more cautious and rigorous approach to compliance." Smaller outfits see such a difficult path to global expansion that some are considering setting up shop in Singapore or Silicon Valley from day one to obscure their Chinese roots, the people said. To avoid Manus-style regulatory snares, they plan to only hire China-based engineers as a low-cost back office. Beijing is piling on the pressure just as startups grapple with escalating geopolitical tensions. Washington has long discouraged US investors from seeding Chinese technology, particularly in sensitive areas like AI. In recent months, China-based fund managers who've backed leading tech companies have used so-called parallel fund structures for fundraising, Bloomberg News reported. Those vehicles allow US investors to keep exposure to non-sensitive sectors, while opting out of industries they are restricted from putting money into. Manus-backer ZhenFund set up a vehicle to house US investors and another for other backers for its latest fund that seeks to raise about $300 million. "The process of packaging a company to make it an attractive acquisition target for US buyers has already evolved into a full-fledged industry," said Jenny Xiao, a San Francisco-based partner at Leonis Capital, which invests in early-stage AI startups. "Manus was the first one to actually pull it off." To be sure, breakouts like DeepSeek and Manus have shown investors Chinese AI is something they can't ignore. DeepSeek has kicked off its first external funding, drawing interest from Tencent Holdings Ltd. and Alibaba Group Holding Ltd. while other AI upstarts like Moonshot are nearing an IPO. The technology underpinning Manus's viral AI agent was developed by the startup's founders while they were living in China. When it was launched in 2025, the agent drew worldwide acclaim for its ability to automate complex tasks, from analyzing stocks to drafting sales pitches. The following month, its parent Butterfly Effect raised $75 million in a round led by Silicon Valley's Benchmark, valuing it at $500 million. That investment triggered a probe by the US Treasury over potential violations of restrictions on investments in sensitive technologies. Manus received queries from US officials, including whether Chinese Communist Party cadres visited its offices, and if its AI agent was built atop Chinese foundation models, according to people familiar with the matter. Representatives for Manus and the US Treasury didn't respond to emailed queries about the investigation. The scrutiny curtailed Manus's effort to train a smaller AI model in-house using Chinese open-source offerings. As costs ballooned, it was forced to seek a suitor for a buyout, the people said. When Manus relocated its China-based staff to Singapore in July, it triggered alarm in Beijing. Officials eventually agreed to the departure on the condition that Manus maintain close ties to the domestic ecosystem, the people said. That understanding may have evaporated with the Meta buyout, one of the people said. In December, Meta announced its acquisition of Manus -- a rare bet on a Chinese-born team -- days after the startup said it topped $100 million in annualized revenue. It wasn't clear at the time whether Beijing would exert its authority on a transaction that technically took place beyond its borders. "Manus may not be a strategic or critical technology for now," said Vey-Sern Ling, managing director at Union Bancaire Privee. "But conceivably in future, some Chinese startups will come up with sensitive technologies and this case will serve as a warning to tread carefully." The startup's aggressive mandate pushed it from product launch to Meta deal in less than a year. That cowboy attitude was captured by a poster hanging in its Beijing office before it relocated to Singapore: "Go big or die. There are no other options."

Xi tests China's reach by blocking already-done Meta deal

China has sought for years to exert influence over business deals beyond its home turf. Still, its decision to press Meta Platforms to unwind a $2 billion acquisition of AI startup Manus marks a step unlike anything it's tried before. The country's powerful state planner decreed Monday that the deal must be canceled -- four months after it was sealed. In doing so, it's targeting a U.S. tech juggernaut with little to no business operations in China and a startup that, while originally from China, had legally moved to Singapore. The two companies have spent months operating on the assumption that the deal was wrapped up. The startup's employees have already moved into Meta offices in Singapore, while its executives have joined the U.S. firm's high-profile AI team. Investors in Manus, including Tencent Holdings, ZhenFund and HongShan, have already received their payouts, according to people familiar with the matter.

China Just Said No To Meta -- Will Trump Hit Back? - Meta Platforms (NASDAQ:META)

AI Sovereignty Goes Mainstream Beijing's move reflects a broader shift: AI assets are no longer treated like typical tech investments. By unwinding the deal following a security review and restricting key personnel's movement, China is effectively drawing a line -- its AI ecosystem is not open to foreign ownership. This extends a trend already visible in semiconductors and data infrastructure. But AI, particularly in areas like autonomous agents and advanced modeling, is now being ringfenced with similar intensity. Reciprocity Back On The Table If American firms are blocked from acquiring or controlling AI assets tied to China, the argument follows: why should Chinese firms enjoy relatively open access to U.S. markets, capital, or technology?" The result may not be immediate retaliation, but the direction of travel is clear. Cross-border AI dealmaking is becoming a two-way negotiation rather than a one-sided opportunity. Deal Flow Meets Political Risk For investors, the takeaway is less about this specific transaction and more about what it represents. Political risk is becoming a core variable in AI dealmaking -- alongside valuation, technology, and growth. What was once a global market for acquiring talent and innovation is starting to fragment. Capital doesn't just chase returns anymore; it navigates policy. A Smaller, More Divided AI Market China's block on Meta may be one deal, but it underscores a bigger shift. The AI economy is splitting into distinct spheres, shaped as much by governments as by companies. And if reciprocity becomes policy, that divide could widen -- reshaping not just who builds AI, but who gets to own it. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Blocking of Meta's AI startup buy raises risk for cross-border China tech deals

China has blocked Meta's acquisition of AI startup Manus. This move signals increased risk for global investors in advanced tech firms linked to China. Beijing is safeguarding strategic assets. The decision discourages stake or asset transfers by Chinese firms to foreign entities without approval. This is a warning for entrepreneurs and investors navigating US-China tech competition. China's blocking of Meta's acquisition of AI startup Manus will heighten the risk for global investors looking to invest in advanced tech firms with ties to the country amid Beijing's expansion of jurisdictional reach to safeguard strategic assets. The National Development and Reform Commission (NDRC), in a rare case, ordered on Monday that the $2-billion-plus acquisition by Meta be unwound under Beijing's national security review mechanism of foreign investments that came into effect in 2021. The powerful state planner's move to block a China-founded and Singapore-headquartered company's takeover will discourage stake or asset transfers by homegrown companies to foreign investors without Beijing's approval, lawyers and analysts said. "Beijing effectively drew a bright red line that Chinese AI talent and technology are not for sale to American companies, full stop," said Han Shen Lin, Shanghai-based China country director at U.S. consultancy firm The Asia Group. It was not immediately clear how Meta would unwind the completed acquisition of Manus, but the Wall Street Journal said on Tuesday, citing people familiar with the matter that the California-based tech giant was ⁠preparing to ⁠do so. Meta and the NDRC did not immediately respond to a Reuters request for comment. On the NDRC decision, China's state-backed Global Times said on Tuesday the issue was not the location of Manus' incorporation or management team but rather "the extent of its connections to China in terms of technology, talent, and data", as well as whether the transaction could jeopardise China's industrial security and development interests. The biggest point of contention was that Manus, an AI company built on the work of Chinese engineers and the Chinese infrastructure environment, abruptly "cut ties" with China after receiving U.S. investment, the report added. Manus, an agent tool built atop Western and local AI models that can autonomously execute complex tasks, was hailed last year by state media as a paragon of China's AI innovation alongside large language model-builder DeepSeek. A year after Manus' launch, its co-founders, CEO Xiao Hong and chief scientist Ji Yichao, have been barred from leaving China after being summoned to Beijing for talks with regulators in March, sources have said. The NDRC move comes weeks before a planned mid-May summit between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing. China roots Manus could become a cautionary tale for Chinese AI entrepreneurs ⁠whose ambitions chafed against the Communist Party's red lines, and whose business ultimately could not survive the shifting faultlines of U.S.-China tech competition. Although Manus did not develop its own artificial intelligence models, Beijing views AI as a sensitive sector critical to national security and has made efforts to control outbound flows of technology, IP and talent. "This is perhaps a warning shot that having a Singapore set-up is not entirely a silver ⁠bullet. If the business still has deep China roots, Beijing may treat it as effectively domestic for sensitive transactions," said Lam Zhen Guang, a lawyer at Clyde & Co. Investors in a China-founded business will demand real operational separation, such as IP assignment, R&D relocation, governance, and clean ownership disclosures, rather than a paper relocation, Lam said. "For founders and VCs, the takeaway is deal certainty risk. Cross-border exits, especially to U.S. buyers, may now carry a higher China regulatory discount unless approvals and China touchpoints are solved early," Lam added. Meta conducted only a few weeks of due diligence to complete the acquisition in December, while neither Meta nor Manus sought Chinese regulatory approval for the deal or its relocation to Singapore, said five sources with knowledge of the matter. At that time, Meta was in a frantic search globally for AI targets, as it aimed to compete with industry peers which had gone ahead with in-house models, said a former investor in Manus. The Singapore relocation for Manus was necessary, the founders believed, for the company to survive amid heightened U.S.-China geopolitical tensions and increased regulatory scrutiny of tech investments, said a separate person with knowledge of the thinking of Manus. Those moves angered senior Chinese officials, whose subsequent investigation had a chilling effect on other Chinese tech startups and investors, said the sources who declined to be named due to the sensitivity of the matter. After the acquisition was announced in December, Manus became part of Meta and all its previous investors, including U.S.-based Benchmark Capital, China's HSG, ZhenFund and Tencent Holdings, exited the company, sources said. Tencent declined to comment. The investment firms did not immediately respond to Reuters requests for comment. 'Unscrmabling the eggs' The unwinding of the Manus acquisition will be complex and may involve reversing ⁠equity transfers, returning funds and requiring the deletion of transferred code, data and other intellectual property, as well as withdrawing personnel, said Andy Han, a partner at AllBright Law Offices in Qingdao. "Fully reversing such transactions is often difficult in reality, particularly in knowledge-intensive sectors, as information already absorbed by engineers or transferred during due diligence cannot easily be undone," Han said. Meta said on Monday the transaction complied fully with applicable law and that it would anticipate an appropriate resolution to the inquiry. "Unscrambling the eggs is always an issue when a deal is blocked by a regulator, unless the acquirer has kept the target separate, which does not appear to have been the case here," said Jeremie Jourdan, a Brussels-based partner at European law firm Geradin Partners. "The fact that Manus moved to Singapore will make it harder for the Chinese authority to enforce their ruling, but they may have other means to force Meta to comply by going after their assets in China," Jourdan said. China's latest regulatory move comes at a time when global investors were increasing their wagers on Chinese artificial intelligence companies, betting on the next DeepSeek and seeking to diversify their holdings. "Any U.S. technology company considering acquiring a Chinese-founded AI startup must now treat NDRC foreign investment security review as a genuine deal risk, regardless of where that company is incorporated," said Asia Group's Lin.

Meta's Purchase of AI Startup Manus Halted by China | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. China's National Development and Reform Commission announced Monday (April 27) that it would "prohibit foreign investment in the Manus project," and required the companies to "withdraw the acquisition transaction." PYMNTS has contacted meta for comment but has not yet gotten a reply. The commission's decision comes months after a report from CNBC that Chinese regulators were investigating the deal, with a focus on whether the acquisition is in keeping with the country's export control laws. Meta announced plans to acquire Singapore-based Manus late last year as part of a larger effort to bolster its AI offerings. "Manus is already serving the daily needs of millions of users and businesses worldwide," Meta said in its announcement. "It launched its first general AI agent earlier this year and has already served more than 147 trillion tokens and created more than 80 million virtual computers. We plan to scale this service to many more businesses." The deal marked one of the most high-profile examples of an American tech giant buying an AI startup with roots in Asia's AI and startup spaces. Manus gained the support of the Chinese government in March of 2025 after it introduced an AI agent that could produce detailed research reports and create custom websites, working with AI models from companies like Anthropic and China's Alibaba. Acquiring Manus would give Meta a "scaled, revenue-generating AI product with direct consumer payments," PYMNTS wrote in a separate Dec. 30 report. Although the tech giant has invested in AI infrastructure and promoted open-source models with its Llama family of models, monetization has been indirect, linked largely to advertising and engagement across social media platforms like Facebook and Instagram. "By acquiring Manus, Meta gains technology and distribution, along with immediate exposure to subscription revenue and insight into consumer willingness to pay for AI-powered assistance," the report added. "The transaction also shortens the timeline for rolling out premium AI offerings without having to build a paid user base from scratch." In related news, PYMNTS wrote earlier this month about the way Meta's status as a social media platform gives it an edge over other players in the AI space, thanks to years of accumulated public user data. "No other AI company holds that position," that report said. "OpenAI knows what users have asked previously. Google knows what they search. Meta knows what they buy, who they follow and what they scroll past."

China blocks Meta from acquiring AI startup Manus - The Korea Times

HONG KONG -- China on Monday blocked U.S. tech giant Meta's acquisition of the artificial intelligence (AI) startup Manus, in an unexpected move to reverse a deal that apparently aroused Beijing's concerns about the transfer of advanced technology. In a one-line statement, China's National Development and Reform Commission, the country's top planning agency, said it was prohibiting a foreign acquisition of Manus and had required all the parties to withdraw from the deal. It did not specifically name Meta Platforms, which owns Facebook and Instagram. The decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. It came after Chinese authorities said they were looking into the deal earlier this year. The commission did not elaborate on the reasons for the ban. The announcement came less than a month before U.S. President Donald Trump's planned visit to Beijing to meet Chinese leader Xi Jinping in May, in a sign that China's communist leaders are tightening scrutiny of the AI industry amid intensifying geopolitical rivalry with the U.S. over the technology. Meta announced in December that it was acquiring Manus, which has Chinese roots but is based in Singapore, in a rare case of a major U.S. tech group buying an AI company with strong links to China. Its deal with Manus, whose "general-purpose" AI agent can perform multistep complex work autonomously, was expected to help expand AI offerings across Meta's platforms. Meta had said there would be "no continuing Chinese ownership interests in Manus" and that Manus would discontinue its services and operations in China. But China said in January that it would investigate whether the acquisition would be consistent with its laws and regulations. China's commerce ministry said at the time that any enterprises engaging in outward investment, technology exports, data transfers and cross-border acquisitions must comply with Chinese law. Meta had said most of Manus' employees were based in Singapore. Manus did not respond to a request for comment. Its website says the company "is now part of Meta," indicating that the deal had already been completed. Meta said on Monday that the Manus transaction "complied fully with applicable law." "We anticipate an appropriate resolution to the inquiry," the California-based company said in a statement. Singapore-based Butterfly Effect Pte was the firm behind Manus ahead of the acquisition. But the AI startup traces its roots back to Beijing-registered entities which were established several years ago. "China is showing the world that it is willing to play hardball when it comes to AI talents and capabilities, which the country views as a core national security asset," said Lian Jye Su, chief analyst at the technology research and advisory group Omdia. "It is strongly indicative of what Chinese authorities may do going forward regarding acquisitions involving Chinese deep-tech companies." Beijing's acquisition ban could deter similar acquisition plans by U.S. tech giants going forward, he said. "In the context of rivalry, it mirrors U.S. export controls, entity lists, and investment curbs on China," said Su.

How China block of AI deal could stop 'Singapore-washing'

Tokyo: When is a Chinese AI startup not a Chinese AI startup? When it's based in Singapore, or elsewhere, to distance itself legally and politically from Beijing. The practice known as "Singapore-washing" is under scrutiny after China blocked a major US acquisition on national security grounds. China's top economic planning body said Monday it prohibited the deal between Facebook owner Meta and the Chinese-developed, Singapore-based artificial intelligence agent tool Manus. That came after a report said two Manus co-founders were prevented from leaving China during a review of the deal. Here, AFP examines what that means: What is Singapore-washing? Firms move abroad "who seek a combination of funding overseas, a laxer regulatory environment, or to appeal to a global customer base without an explicitly Chinese image", said Wendy Chang at the Mercator Institute for China Studies (MERICS). "Beijing has heretofore tolerated this practice, but the Manus case marks a major turning point" as the US-China AI race heats up, she told AFP. The move signals "to its own tech leaders, more than to anybody else, that attempts to bypass national regulation will not be tolerated". Other Chinese tech companies in the Southeast Asian city-state include e-commerce giant Shein, and TikTok -- a subsidiary of ByteDance, which is still based in China. Manus shifted operations to Singapore last year, but "it's unclear whether it has moved the official registration as well, which may give Beijing more leverage", Chang said. AFP has approached Singaporean authorities for comment. Can the deal be undone? Meta and Manus announced the acquisition, reportedly worth around US$2 billion, in December. Meta said Monday that "the transaction complied fully with applicable law", and "we anticipate an appropriate resolution". The Wall Street Journal later reported, citing people familiar with the matter, that the US giant was preparing to backtrack on its acquisition after the Chinese edict. "It may be challenging or even impossible to ultimately reverse this transaction," said Nicholas Cook, a partner at law firm Nixon Peabody CWL. But for Chinese regulators, "no matter the exact deal structure, sensitive AI technology seen as vital to China's national interests... has found its way into the hands of a major US tech actor". "How much the Manus deal can actually be unwound is, in my view, a secondary issue," Angela Zhang, a law professor at the University of Southern California, told AFP. She said China's objective "is to set a precedent and to remind entrepreneurs that they should not transfer critical and sensitive technical know-how overseas without government approval". What's at stake? China wants to prevent leakage of "talent, tech data, capital", said Dylan Loh at Singapore's Nanyang Technological University. The country's AI engineers are a key asset, added Chang at MERICS. "The Meta deal was an 'acquihire', as much about absorbing the talent behind the startup as its technology," she explained. Other analysts said the matter could be a bargaining chip between Chinese President Xi Jinping and US counterpart Donald Trump at upcoming talks. The deal may also have woken Beijing up to the possibility that other companies -- including top AI startup DeepSeek -- could also one day set up shop overseas. What next for other firms? Cook warned that Chinese AI founders "would be well advised to think twice before following in Manus' footsteps". The Financial Times last month said Beijing had restricted two Manus co-founders from leaving China while the review was underway. For Chinese companies using other countries to reach international markets, "this case shows Beijing is not accepting your corporate identity at face value", said Lizzi Lee at the Asia Society Policy Institute. "So if your tech, founders, or talent base are Chinese, then the company is still strategically Chinese, regardless of where it's incorporated," she told AFP. Founders now have a fundamental choice, she said: stay within China and scale domestically, or genuinely relocate even sooner.

China Blocks Meta's $2B Manus AI Acquisition

China's National Development and Reform Commission (NDRC) on April 27 ordered Meta to unwind its over $2 billion acquisition of Manus, a Singapore-incorporated artificial intelligence (AI) agent startup that Chinese founders built in Beijing. The block effectively ends the "Singapore-washing" model, where founders relocate to Singapore to sidestep US-China regulatory scrutiny, and signals that Beijing claims jurisdiction over AI companies based on where founders built them, not where they incorporate. What happened: Why Beijing acted now: US export controls restricted Huawei to 200,000 AI chips in 2024, against Nvidia's one million downgraded H20 chips sold to China alone that year. Washington also banned DeepSeek from US government devices in March 2025, restricting Chinese AI software alongside hardware. Beijing has mirrored this: China banned US chips from government computers in 2024. The Manus block is Beijing's symmetrical counter, controlling the models and talent Chinese founders built the same way Washington controls the chips China needs to build AI. The regulatory framework behind the block: The block relies on Decree 835, issued on April 13 with immediate effect and no grace period. The Regulations on Countering Foreign Improper Extraterritorial Jurisdiction assert China's right to exercise jurisdiction over conduct with an "appropriate connection" to China. This undefined standard gives Beijing wide discretion: a company does not need to operate in China for authorities to assert jurisdiction over its decisions. While the NDRC did not cite a specific provision in its block statement, the April decrees form the broader legal architecture within which the decision sits. Decree 835 also creates a formal Malicious Entity List targeting foreign organisations that promote or implement foreign sanctions measures. Together, these tools shift China from reactive blocking to active extraterritorial assertion. The Manus block marks the first high-profile use of this framework against an AI company.

China blocks Meta from acquiring AI startup Manus

HONG KONG -- China on Monday blocked Meta's acquisition of the artificial intelligence startup Manus, which has Chinese roots but is Singapore-based. In a short statement, China's National Development and Reform Commission, the country's top planning agency, said it was prohibiting a foreign acquisition of Manus and had required all the parties to withdraw from the deal. It did not specifically name Meta, which owns Facebook and Instagram. The decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. It came after Chinese authorities said they were looking into the deal earlier this year. The commission did not elaborate on the reasons for the ban. Meta first announced that it was acquiring Manus in December in a rare case of a major U.S. tech group buying an AI company with strong links to China. Its deal with Manus, whose "general-purpose" AI agent can perform multi-step complex work autonomously, was expected to help expand AI offerings across Meta's platforms. Meta had said there would be "no continuing Chinese ownership interests in Manus" and that Manus would discontinue its services and operations in China. But China said in January that it would investigate whether the acquisition would be consistent with its laws and regulations. China's commerce ministry said at the time that any enterprises engaging in outward investment, technology exports, data transfers and cross-border acquisitions must comply with Chinese law. Meta had said most of Manus' employees were based in Singapore. Meta said on Monday in a response that the transaction "complied fully with applicable law." "We anticipate an appropriate resolution to the inquiry," the California-based company said in a statement.

Startup News: China Blocks Meta's $2B Acquisition of AI Startup Manus

China has blocked Meta's $2 billion acquisition of AI startup Manus. The latest development highlights the growing regulatory scrutiny and geopolitical tensions shaping the future of global technology deals and AI expansion strategies. Several Media reports have already claimed that China plans to restrict top technology firms, including leading AI startups, from accepting US capital without government approval. China's state planner has prohibited the foreign acquisition of the Chinese artificial intelligence startup Manus and ordered the parties involved to cancel the transaction, the National Development and Reform Commission said on Monday. Moonshot AI and StepFun were among the companies that received the guidance, the report said. Regulators have also imposed similar restrictions on TikTok owner ByteDance and do not want the company to approve secondary share sales to US investors without government approval, it added. According to a Bloomberg report, Chinese regulators, including the National Development and Reform Commission, have recently instructed several private technology firms to reject US investment in funding rounds unless explicitly approved. The latest restriction follows 2025 bid to acquire the AI startup Manus, valued at more than $2 billion. After the bidding news grabbed headlines, it immediately triggered investigations into foreign investments in Chinese companies and technology exports. Chinese authorities were concerned that the deals could spur other startups to move advanced technology offshore. Meta had earlier stated that the deal would bring a "leading agent to billions of people and unlock opportunities for businesses across our products".

Meta to backtrack acquisition of AI firm Manus after China block: report - The Economic Times

Meta is reportedly reversing its acquisition of AI startup Manus. China has banned the deal, citing national security. The AI agent was founded in China but is now based in Singapore. Meta stated the transaction complied with law. Analysts had warned of regulatory issues amid US-China tech rivalry.Meta is preparing to backtrack its acquisition of AI startup Manus, the Wall Street Journal reported late Monday, after China banned the transaction, citing national security concerns. Facebook owner Meta announced in December it had agreed to acquire Manus, an artificial intelligence agent created by a company founded in China but now based in Singapore. But China's top body for economic planning, the National Development and Reform Commission, said in a statement on Monday that it will "prohibit the foreign investment in the acquisition of the Manus project" and "requires the parties involved to withdraw the acquisition. The statement did not specifically name Meta. Meta had told AFP in a statement on Monday that "the transaction complied fully with applicable law." "We anticipate an appropriate resolution to the inquiry," it added. Analysts had warned the deal could fall foul of regulators at a time of fierce technological rivalry between Washington and Beijing. The Wall Street Journal, citing sources familiar with the matter, said the U-turn was complicated by the fact that Manus's investors have already received returns from the deal. Meta said in December that the deal -- the financial details of which were not disclosed -- would "bring a leading agent to billions of people and unlock opportunities for businesses across our products." Manus, created by startup Butterfly Effect, says on its website that it can do everything from analyzing the stock market to creating a personalised travel handbook for a trip with simple user instructions.

In blocking Meta-Manus' $2 billion AI deal, China is trying to stem brain drain - The Economic Times

China's National Development and Reform Commission (NDRC) on Monday ordered the cancellation of Meta's acquisition of Manus, the agentic AI firm that had been dubbed the country's "next DeepSeek". Manus was born in China, repackaged in Singapore, and sold to Silicon Valley giant Meta for $2 billion amid one of the most competitive geopolitical rivalries between the two superpowers. Then Beijing slammed the door. The ruling, issued in a single line citing only "laws and regulations", was months in the making. But why was it done? What is Manus? Manus burst onto the global scene in early 2025 when it unveiled what it called the world's first fully autonomous AI agent: software capable of making travel bookings, writing and running code, analysing financial data, and executing complex multi-step tasks with minimal human input. The company was founded in China by CEO Xiao Hong and chief scientist Ji Yichao, with teams initially split between Beijing and Wuhan. Sensing the winds shifting in the US-China tech war, Manus's founders relocated to Singapore in mid-2025, laid off China-based staff, shuttered their Chinese social media accounts, and repositioned themselves as a Singaporean company. In tech circles, this is called "Singapore-washing", and Manus executed it more visibly than any startup before them. In doing so, they raised eyebrows in the Chinese government. The move worked for a short time, with the startup getting backing from San Francisco venture firm Benchmark, and then Meta came calling. In December 2025, the two companies announced a deal valuing Manus at $2 billion. By March this year, more than 100 Manus employees had moved into Meta's Singapore office. China puts a stop Within days of the December announcement, China's commerce ministry said it would investigate whether the deal violated the country's laws on export controls, technology transfers, and overseas investment. In March, regulators summoned Manus cofounders to a meeting in Beijing with NDRC officials. They were also told to not leave the country while the review was ongoing. Stopping the talent outflow The Manus issue is not just about this particular deal, but one of China's major concerns and a pattern that has alarmed its policymakers for years. The country's best AI minds are leaving for American companies and institutions. Per a Carnegie Endowment study published in 2025, 87 of the top 100 Chinese AI researchers working at US institutions in 2019 had remained in the States. Those numbers haunt Chinese tech policy, as the country prepares for a cutthroat AI race. Beijing has poured billions into domestic AI development, built out research institutes, and attempted to engineer a homegrown AI ecosystem capable of competing with OpenAI and Google. But the pull of Silicon Valley with its capital and its compensation has resisted these efforts. The Manus case brought the fear to the fore, that Chinese founders would simply incorporate offshore, make themselves Singaporean, and sell their technology and talent to American acquirers. A warning The Singapore-washing model quietly embraced by a generation of Chinese tech entrepreneurs hoping to access foreign capital while staying out of Beijing's crosshairs, has been invalidated. Beijing has effectively said that moving headquarters does not mean being out of reach. If the technology, the data, and the talent were built in China, China will have a claim on them. Alfredo Montufar-Helu, a managing director at Ankura China Advisors, said that AI has become central to competition between the world's two largest economies, with controls that were once focussed on semiconductors now extending into AI. "China is saying we will prevent foreign acquisition of assets we consider important for national security -- and AI is now clearly one of them," he told Reuters. Meta, on its part, had maintained that "the transaction complied fully with applicable law" and that it anticipated "an appropriate resolution." They may not like the resolution which has come today.

Meta prepares to undo Manus acquisition after China ban, WSJ reports

April 27 (Reuters) - Meta Platforms is preparing to unwind its acquisition of artificial intelligence startup Manus after China blocked the deal on national security grounds, the Wall Street Journal reported on Monday, citing people familiar with the matter. Earlier on Monday, China ordered the U.S. tech major to unwind its $2 billion-plus acquisition of Manus, as Beijing tightens scrutiny of U.S. investment in domestic startups developing frontier technologies. According to the Journal report, the Singapore-based AI startup's investors, which include venture capital firm Benchmark, have already received their returns. Meanwhile, several former Manus investors in Asia, including Tencent, HSG and ZhenFund, are planning to cooperate if Meta proceeds with unwinding the deal, the report said. Beijing has given the two companies a preliminary deadline of several weeks to reverse the transaction and fully restore Manus's Chinese assets to their original state, the Journal reported, adding that this would include removing any data or technology previously transferred from Meta. Chinese regulators have also considered imposing penalties on Manus and Meta if the deal cannot be fully rescinded, the report added. Meta and Manus did not immediately respond to a Reuters' request for comment. The move comes weeks ahead of a planned mid-May summit in Beijing between U.S. President Donald Trump and Chinese President Xi Jinping. China's commerce ministry announced an investigation into the sale in January, days after Meta completed the acquisition. (Reporting by Akanksha Khushi in Bengaluru; Editing by Sumana Nandy)

Meta pokes holes in China's great AI firewall

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.) NEW YORK, April 27 (Reuters Breakingviews) - Meta Platforms has exposed a recurring dilemma for China: the country wants its technology champions to go global, but not to leave home. Beijing effectively ordered the social-media goliath to unwind its $2 billion acquisition of artificial intelligence startup Manus, which had relocated to Singapore. It will be a messy ordeal, one that also hammers home a clear message to other local entrepreneurs. Engineers Red Xiao and Ji Yichao officially launched Manus about a year ago under a Chinese parent. The venture attracted attention from Silicon Valley because its agents can handle complex tasks, from booking travel to managing spreadsheets, with minimal human input. Meta said Manus would exit China entirely with no residual ownership there. Reversing the process will be tricky. Manus had largely extricated itself before Meta boss Mark Zuckerberg came along. After raising $75 million from U.S. venture capital firm Benchmark in May 2025, it closed its China offices, laid off staff and shifted operations to Singapore. Subsequently, Manus employees moved to Meta offices there. Now Beijing is belatedly trying to reassert control. The two co-founders were banned from leaving China during the regulatory review, Reuters reported. Meta's apps, including Facebook and Instagram, don't operate in China, however, limiting the scope of official leverage. Unwinding the deal is also complex. Questions remain over how Meta would recover funds from earlier backers, including Chinese tech giant Tencent, and whether those investments must be reversed under Monday's directive from the National Development and Reform Commission, China's state economic planner. More importantly, once the people, code and intellectual property are integrated, separation becomes even tougher. The episode underscores the AI tension. Beijing officials appear to have underestimated Manus's strategic value, reacting only after the firm decamped and was then acquired. The fallout is also likely to feature in U.S.-China diplomatic discussions scheduled for next month. However the Meta dispute plays out, the deterrence effort will not be lost on locals. Slipping out of China to pursue international capital and suitors won't be easy. It's a painful time for such an edict. U.S. AI startups raised nearly $270 billion in the first quarter, more than 13 times as much as their Chinese counterparts, according to a KPMG report. Even as Manus exemplifies its home country's ambitions in cutting-edge technology, it simultaneously showcases the limitations. China on April 27 ordered social media giant Meta Platforms to unwind its December 29 acquisition of artificial intelligence startup Manus, which relocated to Singapore after it was started in Beijing. The National Development and Reform Commission said it would "prohibit foreign investment in Manus in accordance with laws and regulations, and requires the parties involved to withdraw the acquisition transaction." The state economic planning agency did not name Meta or other overseas investors in Manus. "The transaction complied fully with applicable law," Meta said in a statement to Reuters. "We anticipate an appropriate resolution to the inquiry." (Editing by Jeffrey Goldfarb; Production by Maya Nandhini)

Beijing blocks Meta acquisition of Chinese AI startup Manus - The Economic Times

China's top economic planner has blocked Meta's acquisition of AI startup Manus, citing a prohibition on foreign investment in the project. The National Development and Reform Commission has ordered the parties involved to withdraw the transaction, following earlier reports of travel restrictions on two cofounders.China's state planner blocked U.S. tech giant Meta's purchase of Chinese artificial intelligence startup Manus on Monday, ordering the cancellation of the deal as Beijing and Washington jostle over supremacy in frontier industries. The decision by China's National Development and Reform Commission (NDRC) highlights Beijing's commitment to stop AI talent and intellectual property from being acquired ⁠by U.S. ⁠entities, as Washington tries to hamper its AI development with export controls designed to cut off access to U.S. chips. It could also add another thorny issue to the agenda of a planned mid-May Beijing summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping. California-based Meta, which owns Facebook, acquired Manus in December for more than $2 billion in a ⁠bid to boost its capabilities in AI agents, tools that can execute more complex tasks than chatbots with minimal human intervention. But in ⁠March, Manus CEO Xiao Hong and chief scientist Ji Yichao were barred from leaving China as regulators reviewed the deal, sources familiar with the matter said. Manus was hailed early last year by state media and commentators as China's next DeepSeek after releasing what it said was the world's first general AI agent. Months later Manus moved its headquarters from China to Singapore, joining a wave of other Chinese companies that have done so to curb risks from the U.S.-China tensions. Alfredo Montufar-Helu, a managing director at Ankura China Advisors, said Beijing's intervention ⁠reflects how AI has become central to strategic competition between the world's two largest economies, with controls that were once focused on semiconductors now extending into AI. "China is saying we will prevent foreign acquisition of assets we consider important for national security -- and AI is now clearly one of them," he said, adding that the move also signals to firms that relocating overseas will not shield them from scrutiny.

China blocks Meta's acquisition of Manus amid escalating tech tensions

Chinese authorities have moved to block Meta's proposed acquisition of AI startup Manus, in a deal worth $2bn. The National Development and Reform Commission has called for the transaction to be abandoned, citing compliance with foreign investment regulations without providing further details. This decision comes as the deal was already facing heightened scrutiny from regulators in both China and the US. Founded in China before relocating to Singapore, Manus develops AI agents capable of executing complex tasks. The company has seen rapid growth, reaching over $100m in annual recurring revenue in under a year. The proposed buyout reignited concerns regarding "Singapore-washing" relocation strategies, used to circumvent certain regulatory constraints. Meta intended to integrate these technologies into its product suite, most notably its Meta AI assistant. This intervention underscores the tightening of controls on investments in sensitive technologies amid intensifying rivalry between major powers. Beijing wants to limit the transfer of strategic technologies, while Washington is also ramping up its own restrictions. This decision could further complicate cross-border transactions within the artificial intelligence sector.

Chinese Regulators Block Meta's Over $2 Billion Deal for AI Startup Manus

Chinese regulators have blocked Facebook parent Meta's over $2 billion acquisition for AI startup Manus, underlining heightened scrutiny of high-tech companies getting U.S. investment. The National Development and Reform Commission said Monday that it has decided to prohibit the acquisition of Manus by a foreign entity and asked the parties involved to terminate the transaction. That came after China's commerce ministry said in January that authorities would conduct an investigation into the deal. Meta agreed to buy Manus, a Singapore-based company with Chinese founders, for more than $2 billion late last year. Last month, China had told two co-founders of the startup not to leave the country while authorities review the sale to Meta, The Wall Street Journal reported, citing people familiar with the matter. Founded by Chinese entrepreneurs, the company has made strategic decisions to distance itself from its Chinese roots. Last year, Manus turned down some local governments in China that wanted to invest in the company, the Journal reported previously. It moved its base to Singapore in mid-2025. Meta didn't immediately respond to a request for comment.

China doesn't want Meta's Mark Zuckerberg to buy Manus AI, here is why

The decision shows tighter rules on tech deals and rising global competition in AI. China has stepped in to stop a major artificial intelligence deal. The country ordered Meta Platforms to unwind its 2.5 billion dollar purchase of the startup Manus. The decision was announced by the National Development and Reform Commission. Officials said it is based on national security concerns linked to cross-border technology transfers. Many industry watchers believe it also reflects rising tension between China and the United States over control of advanced AI tools. The current move from the Chinese governments clearly states that they are becoming more careful about foreign investment in important technology sectors, and political decisions can affect business deals in the global tech industry. These actions might slow things down, but they can also help protect a country's national interests. The Chinese regulator said the deal must be reversed after a review found risks linked to foreign control of sensitive technology. Under Chinese law, investments that affect national security can be blocked or cancelled. Officials argued that Manus still has strong roots in China through its original entity, Beijing Butterfly Effect Technology. Also read: Using Windows or Microsoft Office? India issues high-severity cyber alert, how to stay safe Manus created an AI agent that can do complex work like writing detailed reports and making presentation slides. The company started in China in 2022 but later moved much of its work to other countries. A Singapore-based entity took over global operations, and many employees were relocated there after foreign investment. Meta completed the acquisition in late December, and soon after that the Chinese authorities opened an investigation. Reports said Manus co-founders Xiao Hong and Ji Yichao were asked to remain in China during the review process. Also read: Samsung Galaxy S25 Ultra price cut alert! Save up to Rs 30,000 on Amazon Meta said the deal followed all legal requirements and expressed hope for a fair outcome. The company also stated that Manus would end its China operations and remove any local ownership links. However, the original Chinese entity has not yet been fully shut down. Regulators appear concerned that similar moves could allow Chinese technology to leave the country without proper oversight. The case shows that Beijing is trying to stay in control of how AI develops, especially as competition around the world is getting stronger.