China Blocks Meta’s $2 Billion Manus AI Acquisition After Regulatory Scrutiny

In a major setback for global tech expansion, China has blocked Meta’s proposed $2 billion acquisition of AI startup Manus, following regulatory scrutiny by the country’s top economic authority.

The decision was taken by the National Development and Reform Commission (NDRC), which ordered both companies to completely unwind the deal. Notably, the commission did not provide an official explanation for its move, making it one of the most significant interventions in a cross-border technology acquisition in recent years.

The development is seen as a major blow to Meta’s ambitions in the rapidly evolving AI sector. The company, led by CEO Mark Zuckerberg, had been aggressively expanding its capabilities in AI agents, with Manus expected to play a central role in this strategy.

Manus, an agentic AI startup founded by Chinese engineers, had already begun integrating with Meta’s operations. Reports indicate that nearly 100 Manus employees had relocated to Singapore and taken on key roles within Meta’s offices. With the deal now reversed, this could lead to significant operational and organizational disruptions for both companies.

The startup had shifted its headquarters from China to Singapore around mid-2025, a move widely seen as an effort to facilitate international partnerships and investments. Shortly after, Meta moved forward with its acquisition plans, officially announcing the deal in December 2025, with a valuation estimated between $2 billion and $3 billion.

Meta intended to integrate Manus’s advanced AI agent technology directly into its ecosystem, particularly within its Meta AI initiatives. However, the abrupt regulatory block now raises broader concerns about geopolitical tensions, data security considerations, and increasing scrutiny over cross-border AI investments.

Industry experts believe the decision could signal tighter controls from Chinese regulators on technology transfers and foreign acquisitions, especially in sensitive sectors like artificial intelligence. It also highlights the growing complexity of global AI expansion, where regulatory frameworks are becoming as critical as technological innovation.