China blocks Meta’s $2 billion acquisition of Manus

On Monday, the National Development and Reform Commission (NDRC), which is China’s top economic planner, officially blocked Meta’s acquisition of Manus. The Chinese regulator ordered both parties to completely unwind the transaction, which was valued at $2 billion. In its official announcement, the NDRC stated: “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.” The move marks one of China’s most significant interventions in a cross-border deal, extending beyond U.S.-China tensions and directly into the broader AI industry.

Despite the regulatory block, the operational reality of the transaction remains highly complex. Around 100 Manus employees have already relocated to Singapore, having moved into Meta’s offices there in March, where CEO Xiao Hong reports to Meta COO Javier Olivan. However, the startup’s leadership faces legal restrictions within mainland China. Manus CEO Xiao Hong and Chief Scientist Yichao Ji are reportedly under exit bans, preventing them from leaving mainland China. Manus was originally founded in 2022 by Xiao Hong, Yichao Ji, and Tao Zhang. The founders initially established its parent company, Butterfly Effect, in Beijing before relocating the startup’s headquarters from China to Singapore in mid-2025.

Meta originally announced its acquisition of Singapore-based Manus in December 2025, having acquired the startup late last year for an acquisition price range of roughly $2 billion to $3 billion. Meta’s plans involved folding the startup’s agent technology directly into Meta AI. In response to the NDRC’s ruling, a spokesperson at Meta stated that the transaction complied fully with applicable law and that the company anticipates an appropriate resolution to the inquiry. Meanwhile, the transaction has also faced political headwinds in the U.S. Senator John Cornyn raised concerns about Benchmark’s investment in Manus, questioning whether American capital should be flowing to a Chinese-linked firm given the startup’s origins. Manus did not respond to requests for comment.

Why it matters

This intervention marks a significant escalation in China’s oversight of cross-border AI deals, potentially stalling Meta’s ambitions in the agentic AI sector—which focuses on AI systems capable of performing tasks autonomously.