China Blocks Meta’s $2 Billion Acquisition Of AI Startup Manus After NDRC Probe

China moved to block Meta’s acquisition of the Chinese-founded AI startup Manus, ordering the parties to unwind the transaction after a months-long probe by Beijing’s state planner.

“China blocks Meta's $2bn acquisition of AI start-up Manus Facebook-owner Meta's acquisition of AI start-up Manus has been blocked by Chinese regulators”

BBC

Multiple outlets tied the decision to the National Development and Reform Commission (NDRC), with CNBC describing a brief statement in which the NDRC called for Meta to unwind its “$2 billion acquisition of Manus” and asked the parties “to withdraw the acquisition transaction.”

BBC

Reuters reported that China’s top economic planner ordered both parties to unwind the deal entirely, quoting the NDRC’s statement that it “has made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations, and has required the parties involved to withdraw the acquisition transaction.”

NPR similarly said the NDRC’s decision came in a one-line statement prohibiting a foreign acquisition of Manus and requiring “all the parties to withdraw from the deal,” adding that it was made by the commission’s Office of the Working Mechanism for Security Review of Foreign Investment.

The BBC framed the same move as Beijing prohibiting foreign investment in the deal, requiring “the parties involved to withdraw the acquisition transaction,” and noted that Meta said the transaction “complied fully with applicable law.”

In parallel, The Straits Times put the acquisition figure at “US$2 billion (S$2.5 billion)” and said the NDRC ordered the deal’s cancellation on April 27, while TechCrunch described the block as “one of China’s most significant interventions in a cross-border deal.”

The block followed a probe that Beijing launched earlier in the year, and the situation became more complicated as Meta had already integrated Manus into its systems and brought executives into the company.

CNN said Beijing launched a probe in January, describing an “unusually swift move” in which “Beijing launched a probe into the acquisition in January,” seeking to discourage other Chinese tech startups from pursuing a similar strategy.

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TechCrunch added that the NDRC ordered both parties to unwind the deal “with no explanation offered,” and it described how the transaction was already far along: “Around 100 Manus employees have already moved into Meta’s Singapore offices as of March,” and “founders taking on executive roles.”

TechCrunch also reported that CEO Xiao Hong now reports directly to Meta COO Javier Olivan, and it said “Manus CEO Hong and Chief Scientist Yichao Ji are reportedly under exit bans, preventing them from leaving mainland China.”

CNBC echoed the broader picture of integration and scrutiny, saying the deal had attracted scrutiny from both China and Washington and that Beijing increased efforts to discourage Chinese AI founders from moving business offshore.

Forbes described the decision as coming from the NDRC’s foreign investment review arm and said it issued an order to unwind the acquisition, while NPR said the NDRC’s decision was made by the Office of the Working Mechanism for Security Review of Foreign Investment and did not elaborate on reasons.

In the same reporting stream, CNN said that soon after Meta announced the acquisition in late December, “Meta had integrated Manus into its internal systems and executives of the startup had joined the American tech giant,” and it noted that the blocked acquisition could be a missed opportunity for Meta’s AI capabilities.

The Straits Times added that the deal was “largely completed,” stating that “capital has been transferred and the start-up’s executives have joined the US company’s rapidly expanding AI team,” and it said “Manus employees have already moved into Meta offices in Singapore.”

Meta and Manus repeatedly framed the deal as compliant with Chinese law, while Chinese regulators presented the move as a security review decision tied to foreign investment rules.

“China's state planner on Monday called for Meta to unwind its $2 billion acquisition of Manus, a Singaporean artificial intelligence startup with Chinese roots”

CNBC

TechCrunch quoted a Meta spokesperson saying, “The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry,” and it reported that Meta had not offered further detail on how it would resolve the inquiry.

CNN similarly quoted a Meta spokesperson telling it that the transaction “complied fully with applicable law,” and it added that Meta said it “anticipate[s] an appropriate resolution to the inquiry,” without elaborating.

BBC also carried Meta’s statement that “the transaction complied fully with applicable law,” and it included Meta’s expectation of “an appropriate resolution to the inquiry.”

On the Chinese side, Reuters provided the NDRC’s statement that it “has made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations,” and it required the parties to withdraw the acquisition transaction.

NPR said the NDRC’s statement prohibited a foreign acquisition of Manus and required “all the parties to withdraw from the deal,” and it said the decision was made in accordance with Chinese laws and regulations.

CNBC described the decision as made “in accordance with laws and regulations,” and it said the NDRC “called for Meta to unwind its $2 billion acquisition of Manus.”

Forbes added that China’s official Xinhua News Agency said the NDRC foreign investment review arm issued a decision to block the sale and ordered the parties to unwind the acquisition.

The dispute drew attention to Manus’s Chinese roots and its cross-border move to Singapore, with outlets describing both the startup’s origin story and the US political scrutiny around investments tied to Chinese-linked firms.

TechCrunch said Manus was founded in 2022 by Hong, Ji, and Tao Zhang, and it reported that Manus relocated its headquarters from China to Singapore around mid-2025 before Meta acquired it.

CNN

It also said Manus’ founders previously established its parent company, Butterfly Effect, in Beijing in 2022 before relocating to Singapore, and it described how the background drew scrutiny in Washington, where Senator John Cornyn raised concerns about Benchmark’s investment in the company.

CNBC similarly said Manus was founded in China before relocating to Singapore and described the “Singapore-washing model” where companies relocate from China to the city-state to avoid scrutiny from Beijing and Washington.

Forbes said Manus launched as an AI agent in March last year and described the “general-purpose” AI agent designed to autonomously carry out complex tasks, while it also described early versions developed by Beijing Butterfly Effect Technology founded in 2022.

The Straits Times provided additional funding details, saying its parent Butterfly Effect raised “US$75 million” in a round led by Benchmark and that the investment triggered a probe by the US Treasury over potential violations of restrictions on investments in sensitive technologies.

It also said Manus surpassed “US$100 million in annualised revenue” and that Meta announced its acquisition in December after that milestone.

In parallel, The Straits Times said Manus co-founders Xiao Hong and Ji Yichao had been barred from leaving China, citing the Financial Times, and it described how the buyout triggered a Beijing probe into illegal foreign investment and tech exports shortly after its December announcement.

The block is expected to reverberate through China’s AI startup ecosystem and shape how future cross-border deals are structured, especially as regulators tighten scrutiny ahead of high-level US-China diplomacy.

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Financial Times

CNN said the move “is expected to have a chilling effect on China’s AI startup scene,” and it linked the timing to “just weeks ahead of US President Donald Trump’s much anticipated summit with Chinese leader Xi Jinping in Beijing.”

Forbes

NPR similarly said the announcement came “less than a month before U.S. President Donald Trump’s planned visit to Beijing to meet Chinese leader Xi Jinping in May,” framing it as a sign of tightening scrutiny of the AI industry amid intensifying geopolitical rivalry.

TechCrunch described the intervention as “one of China’s most significant interventions in a cross-border deal,” and it emphasized that the unwinding order required both parties to withdraw the acquisition transaction entirely.

The Straits Times said the decision was likely to send a chill through China’s “burgeoning artificial intelligence sector,” and it described critics lamenting “the leakage of technology to the US,” while also noting that it emerged weeks before the Trump-Xi summit.

Forbes added that the decision could deter similar acquisition plans by US tech giants going forward, quoting Lian Jye Su, chief analyst at Omdia, who said it is “strongly indicative of what Chinese authorities may do going forward regarding acquisitions involving Chinese deep-tech companies.”

The BBC described the broader tech tensions, including a White House statement about “industrial-scale campaigns” to steal advances in the technology and a Chinese embassy representative’s response that “the unjustified suppression of Chinese companies by the US” was at issue.

CNBC also reported that the intervention drew alarm among tech founders and venture capitalists in China who were hoping to take advantage of the “Singapore-washing model,” and it said Beijing increased efforts to discourage Chinese AI founders from moving business offshore.