China has blocked Meta's $2 billion purchase of the AI startup

China has blocked Meta Platforms' acquisition of Manus, an AI startup that develops universal AI agents. The amount of this purchase was estimated at $2 billion.

According to Bloomberg, the decision was made by China's National Development and Reform Commission, which ordered the deal to be canceled. The Financial Times (FT) points out that the move was related to a review of the deal to see if it violated Beijing's investment rules. The Wall Street Journal (WSJ) writes: China cited national security concerns, fearing that Manus' "move" would set a precedent and encourage other Chinese companies to move their business abroad without proper authorization.

"The transaction was fully compliant with applicable law," a Meta spokesperson said, adding that the company expects "this matter to be properly resolved"(quoted in The Wall Street Journal).

Shares of the American bigtech company are down 0.11% on the premarket on April 27. Its plans to buy Manus became known back in late December last year.

Although Manus was registered in Singapore, its founders are from China, Bloomberg recalls. Launched in March 2025, Manus is a general-purpose AI agent capable of automating complex tasks, from analyzing the S&P 500 index to making trade proposals. Meta announced the acquisition of Manus in December 2025 after the company's annual revenue exceeded $100 million. Following the deal, Meta said Manus' Chinese owners would have no stake in the company and the startup would cease operations in China. Early versions of Manus were created by engineers at Beijing Butterfly Effect Technology, a company founded in the PRC in 2022, the WSJ recalls. Manus has been working to shut down Beijing Butterfly Effect Technology, but has not yet done so, the newspaper points out.

Following the deal between Meta and Manus, Chinese authorities engaged several agencies to review the agreement, the FT notes.

The mechanism for canceling the deal remains uncertain, Bloomberg points out: in fact, the integration of Manus into Meta's structure has already been completed. The capital has been transferred, the selling shareholders have been paid, and the startup's team has joined Meta's AI division. According to Bloomberg's sources, Manus employees have already started working in the Singapore office of the American corporation.

In March, Chinese officials summoned the two co-founders of Manus - Xiao Hong and Ji Yichao - to a meeting in Beijing to discuss the deal. According to the WSJ, the former Manus executives, who are now Meta employees, have been banned from leaving the country during the investigation. Many of Manus' top managers are Chinese citizens, the newspaper notes.

The decision to block the Meta and Manus deal could be a major setback for Meta in its attempts to compete in the AI field with rivals such as Microsoft, Google, OpenAI and Anthropic, Bloomberg notes. Manus was supposed to help Meta take the lead in AI agents - services that use artificial intelligence to perform specific tasks on a user's PC.

In addition, blocking the deal is likely to cause a "freeze effect" in China's booming AI sector, Bloomberg writes. The decision came just weeks before a planned high-level summit between US President Donald Trump and Chinese President Xi Jinping.

Against the backdrop of this deal, Beijing has sharply tightened its supervision of systemically important IT companies, Bloomberg emphasizes. In order to prevent a repetition of the "Manus scheme," Chinese agencies have introduced new protective mechanisms, effectively blocking similar opportunities for other startups. In particular, government agencies have begun notifying Chinese AI companies that they must reject U.S.-origin capital in funding rounds unless explicitly approved by the authorities. Similar restrictions have been imposed on ByteDance, the owner of TikTok, among others, Bloomberg points out.

The measures risk further isolating China's recovering tech sector from the venture capital funding that has sustained it for two decades, Bloomberg summarizes.

This article was AI-translated and verified by a human editor