Meta’s ambitious push to dominate the artificial intelligence sector suffered a significant regulatory setback on Monday as Chinese authorities formally blocked the company’s $2 billion acquisition of the AI startup Manus.
The intervention by China’s National Development and Reform Commission marks an aggressive stance in the escalating tech rivalry between Washington and Beijing, as the country’s top planning agency issued a one-line directive ordering all parties to withdraw from the transaction.
The ruling effectively mandates the unwinding of a deal that had already reached advanced stages, with Meta having previously begun integrating the startup’s proprietary software into its ecosystem, according to a CNBC report.
The startup, Manus, gained prominence early last year for its development of autonomous AI agents capable of executing complex, multi-step tasks such as software coding and market analysis without human intervention.
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While the company had relocated its operations to Singapore in a strategic pivot to go global, its roots remained deeply embedded in mainland China, where its core technology was originally engineered by teams in Beijing and Wuhan.
Chinese officials, who had been investigating the transaction since early this year, reportedly viewed the acquisition as a problematic “technology leakage,” fearing that homegrown innovation was being siphoned off to bolster the AI capabilities of American tech giants.
For Meta, the forced cancellation of the Manus acquisition represents a major blow to its product roadmap, as the company had sought to leverage the startup’s technology to deploy advanced AI agents across its suite of platforms, including Facebook and Instagram.
The decision also complicates the broader geopolitical landscape, arriving just weeks before a high-profile summit between U.S. President Donald Trump and Chinese leader Xi Jinping. With the Chinese government now imposing strict scrutiny on domestic AI companies accepting foreign capital, the move signals a broader trend of Beijing aggressively ring-fencing its intellectual property and talent to prevent the loss of strategic high-tech assets to foreign rivals.
Meta has maintained that the transaction complied fully with applicable law and indicated it is seeking an appropriate resolution to the regulator’s inquiry, though the path to unwinding such a deeply integrated deal remains highly uncertain.
