China halts Meta’s $2B Manus acquisition after extended regulatory review

China's top economic authority, the National Development and Reform Commission (NDRC), announced on Monday that it has blocked Meta's proposed $2 billion acquisition of Manus, an agent-focused artificial intelligence company founded by Chinese engineers that later relocated to Singapore before being acquired by Meta last year.

The decision represents one of the most notable interventions by Chinese regulators in a cross-border technology deal. It extends beyond broader U.S.-China tensions into the competitive landscape of the AI industry. For Meta, the move could significantly affect its strategy in the rapidly evolving AI agents sector.

The NDRC did not provide a detailed explanation of its ruling but instructed both parties to unwind the transaction in full. In its statement, the commission said it had determined to prohibit foreign investment in the Manus project in accordance with applicable laws and regulations, requiring all involved parties to reverse the acquisition.

The situation is complicated by developments that have already taken place. Approximately 100 Manus employees had transitioned to Meta's Singapore offices by March, with company founders assuming executive roles within Meta. Manus CEO Xiao Hong now reports directly to Meta's chief operating officer, Javier Olivan. At the same time, reports indicate that Hong and Manus chief scientist Yichao Ji are currently subject to exit restrictions that prevent them from leaving mainland China.

A spokesperson for Meta stated that the transaction complied with all applicable laws and expressed confidence that the matter would be resolved appropriately.

Manus was established in 2022 by Hong, Ji, and Tao Zhang. The company initially operated in China before relocating its headquarters to Singapore around mid-2025. Shortly thereafter, Meta moved to acquire the startup, announcing the deal in December 2025 at an estimated value between $2 billion and $3 billion, with plans to integrate Manus' agent-based technology into its broader AI initiatives.

The acquisition was structured to require a complete separation from Chinese ownership and operations. However, Manus' origins have drawn attention from policymakers in the United States. John Cornyn previously raised concerns about the company's investment ties, questioning whether U.S. capital should be directed toward firms with links to China. The regulatory decision by China adds further complexity to an already sensitive cross-border transaction, leaving uncertainty about how Meta will proceed as it looks to strengthen its position in the global AI market.