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

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In brief - China's National Development and Reform Commission ordered Meta to unwind its acquisition of AI startup Manus. - The December 2025 deal was valued at approximately $2 billion. - 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. The company confirmed last week that it will cut 8,000 jobs and leave 6,000 roles unfilled, and then announced it will potentially spend billions of dollars on Amazon’s AI chips.

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