Manus code has been handed over, investment funds have been pocketed, the intent behind China still forcing Meta to cancel the acquisition

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China's NDRC ordered the reversal of Meta's $2 billion acquisition of AI startup Manus on Monday, despite the deal having been completed over four months ago. Analysts believe the forced termination is technically meaningless. Beijing's remaining leverage lies in controlling the cross-border freedom of movement of Manus's founders and sending a warning to other Chinese AI startups attempting to follow the "Singapore exit" model. (Context: China blocks Meta's acquisition of Manus: $2 billion deal ends, Singapore exit model declared ineffective) (Background: AI unicorn Manus clears social media and lays off 70% of staff overnight; what is the truth behind the escape from China?) On the 28th, China's National Development and Reform Commission (NDRC) announced that Meta's $2 billion acquisition of AI startup Manus must be reversed. Bloomberg reported that this is the first time Beijing has publicly invoked a dormant 15-year-old foreign investment security review mechanism to issue a ruling. The target is a U.S. tech giant whose primary business has long since moved outside of China, and an AI startup that had already legally relocated to Singapore. The absurdity of this ruling in reality is that Manus employees have already moved into Meta's Singapore office, and the founders have joined Meta's high-profile core AI team. Manus's code has not only been delivered but has already been integrated into Meta's services. Investors including Tencent Holdings, ZhenFund, and Sequoia China have all received full refunds. U.S. venture capital firm Benchmark went further: it led a $75 million funding round for Manus last year and has now distributed some of the proceeds to its limited partners (investors), which is typically the final step in fully closing out an investment. Meta's public response was cautious and vague: the company stated it has "fully complied with relevant laws" and looks forward to a proper resolution, without providing further details. Bloomberg noted that Beijing's forced reversal of a deal is not without precedent. In 2021, after Didi Global completed its IPO on the New York Stock Exchange, it was ordered by Beijing to delist. It has yet to be able to relist on other exchanges, and its market value has shrunk from its peak to approximately $17 billion. However, the Manus situation is more difficult: Didi's delisting only involved removing shares from the U.S. market, whereas the requirement for Manus is to "restore to pre-acquisition status" a startup whose employees have already joined a foreign company and whose code has already been integrated into foreign systems—a task that is technically almost impossible. The forced termination is practically unenforceable, a point even analysts in Beijing do not shy away from. "The Manus ruling is largely symbolic; reversing the deal is not feasible at this point. Capital and technology transfers have already been completed," Laila Khawaja, Director of Research at Gezer Technology, told Bloomberg. She pointed out that forcing Manus founders and investors to return money to Meta would result in the U.S. company retaining key AI technology for free, getting nothing back, and effectively rendering the cost of the entire acquisition zero. Furthermore, Beijing's leverage over Meta itself is inherently limited: Facebook and Instagram have long been blocked in China, and Meta has almost no substantive business there. Khawaja's assessment is direct: "Beijing's remaining leverage lies in controlling the cross-border movement of Manus executives and potentially forcing them to resign from Meta." Bloomberg analyzes that the true impact of this case is not on Meta or Manus itself, but on the signal it sends to the entire Chinese AI startup ecosystem. A large number of Chinese AI startups have been evaluating the "Singapore model" in recent years: moving companies, IP, and core talent out of mainland China in exchange for offshore financing eligibility and market access, while loosening the shackles of CCP regulation. Manus was once one of the most successful templates for this route. Liu Xu, a researcher at the National Strategy Institute of Tsinghua University, pointed out to Bloomberg that this is the first time the authorities have publicly invoked this foreign investment review mechanism to issue a ruling; foreign acquisitions involving high-tech (especially AI) sectors, or high-valuation exit cases, will be subject to strict security reviews in the future. He emphasized that deals "that may lead to core patents or key technologies falling into the hands of foreign forces" will receive particular attention. The NDRC has also begun pressuring other AI startups. Bloomberg reported last week that Moonshot AI and Stepfun have been told they cannot accept U.S. capital without explicit approval; similar restrictions also apply to ByteDance, China's highest-valued startup. All of this is happening on the eve of a summit expected between Trump and Xi Jinping within weeks, with topics covering investment, technology access, AI, and trade. Whether the Meta-Manus incident is significant

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