China's National Development and Reform Commission has ordered Meta to unwind its acquisition of Chinese AI startup Manus, requiring both parties to reverse the transaction in full.
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, valuing the deal at approximately $2 billion. Within weeks, China's commerce ministry launched an investigation in January 2026, and by March 2026 the scrutiny had intensified significantly.
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 its China operations months earlier, closing its offices there and laying off dozens of employees in July 2025. Manus also relocated from China to Singapore around mid-2025, though the move did not prevent Chinese regulators from issuing the veto.
Manus develops what it describes as "truly autonomous" AI agents capable of planning and executing tasks independently. The company's rapid growth attracted substantial investor interest: it 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.
Around 100 Manus employees had already moved into Meta's Singapore offices by March 2026.
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.
Meta's attempted acquisition of Manus was part of a broader effort by the social media giant — parent company of Facebook and Instagram — to aggressively expand its AI capabilities and compete with rivals such as OpenAI, Anthropic, and Google. The company confirmed last week that it will cut 8,000 jobs and leave 6,000 roles unfilled, and separately announced plans to potentially spend billions of dollars on Amazon's AI chips.
Why it matters
China's NDRC — the body overseeing economic planning and AI policy — exercised authority to block a deal even after the target company had relocated to Singapore, showing that regulatory reach can extend beyond a startup's physical presence in China.
The case illustrates how AI assets have become a strategic priority for Beijing, with the government willing to intervene in cross-border acquisitions to prevent foreign control of homegrown AI technology.
The travel ban imposed on Manus co-founders Xiao Hong and Ji Yichao went beyond standard merger-review procedures, directly restricting the personal freedom of the founders during the regulatory process — a step that highlights the personal stakes involved in high-profile cross-border tech deals.
