China blocks Meta’s Manus AI deal, orders cancellation

China’s National Development and Reform Commission (NDRC) said on Monday it blocked Meta’s acquisition of Chinese artificial intelligence startup Manus and ordered the transaction to be cancelled.

The decision reverses a deal Meta, the California-based owner of Facebook, completed in December for over $2 billion. The company pursued the purchase to strengthen its AI agent capabilities, according to the account in the source material.

Regulatory review began in March

The NDRC’s order followed a regulatory review that began in March, the source material said. The sequence described places the regulator’s intervention after the acquisition had already been completed.

During the review period, Manus CEO Xiao Hong and chief scientist Ji Yichao were reportedly prevented from leaving China, according to the same account. The episode highlights how oversight can extend beyond corporate filings to include the movement of key personnel during sensitive examinations.

Manus moved its headquarters to Singapore

Manus had previously shifted its headquarters from China to Singapore. The move was described as an effort to reduce exposure to risks tied to U.S.-China tensions.

Even so, the NDRC’s cancellation order was presented as a signal that relocating overseas does not necessarily remove a company from Chinese scrutiny when authorities view the underlying technology, intellectual property, or talent as strategically sensitive.

AI treated as a strategic and security-linked sector

In the source material, the decision was framed as part of Beijing’s broader approach to limiting foreign access to what it considers critical AI intellectual property and expertise. The account also described AI as being treated as closely linked to national security and long-term strategic competition.

The same account characterized the move as an expansion of regulatory controls beyond semiconductors to include AI assets. It said this reinforces the idea that advanced technology sectors can face heightened review in cross-border transactions.

Deal uncertainty and unanswered questions

The cancellation order adds a new friction point in the technology rivalry between China and the United States, as described in the source material. For global markets, the move underscores that cross-border M&A involving AI can face abrupt regulatory reversals, affecting deal certainty, valuation assumptions, and integration timelines for multinational technology firms.

Key details remain unclear based on the information provided. The source material did not specify the legal basis cited by the NDRC, the timeline for unwinding the transaction, or what remedies may be available to the parties.

It also did not detail how the cancellation will affect Manus’s operations following its headquarters move to Singapore, or how Meta will adjust its AI strategy after the blocked acquisition.