China blocks Meta’s $2B Manus deal after months-long probe
▼ Summary
– China’s NDRC blocked Meta’s $2 billion acquisition of Manus, an AI startup founded by Chinese engineers and relocated to Singapore, without providing an explanation.
– The prohibition is one of China’s most significant cross-border deal interventions, potentially harming Meta’s ambitions in the AI agents space.
– Around 100 Manus employees have already moved into Meta’s Singapore offices, and founders hold executive roles, but CEO Xiao Hong and Chief Scientist Yichao Ji are under exit bans from mainland China.
– Meta stated the transaction complied with applicable law and expects an appropriate resolution, while the NDRC ordered both parties to unwind the deal entirely.
– Manus, founded in 2022 and headquartered in Singapore by mid-2025, has drawn U.S. scrutiny over its Chinese origins, with Senator John Cornyn questioning American investment in the firm.
China’s National Development and Reform Commission (NDRC) has officially blocked Meta’s $2 billion acquisition of Manus, an agentic AI startup founded by Chinese engineers that relocated to Singapore before being acquired by Mark Zuckerberg late last year. The decision, announced Monday, represents one of Beijing’s most aggressive moves to date in regulating a cross-border tech deal, reaching far beyond the usual U.S.-China friction and into the heart of the AI industry.
Without offering any detailed reasoning, the NDRC ordered both parties to fully unwind the transaction. “The National Development and Reform Commission (NDRC) 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,” the agency stated.
The situation, however, is messy. By March, roughly 100 Manus employees had already integrated into Meta’s Singapore offices, with founders assuming executive roles. CEO Xiao Hong now reports directly to Meta COO Javier Olivan. Meanwhile, both Hong and Chief Scientist Yichao Ji are reportedly under exit bans, preventing them from leaving mainland China.
A Meta spokesperson told TechCrunch, “The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.”
Manus was founded in 2022 by Hong, Ji, and Tao Zhang. The startup moved its headquarters from China to Singapore around mid-2025, and Meta came calling just months later. The company announced the acquisition in December 2025 for an estimated $2 billion to $3 billion, planning to embed Manus’s agent technology directly into Meta AI.
Meta had agreed to acquire the Singapore-based AI startup, with the deal requiring a full exit from Chinese ownership and operations, according to Nikkei Asia. But Manus’s roots remain firmly in China. Its founders launched the parent company, Butterfly Effect, in Beijing in 2022 before relocating to Singapore. That background has sparked scrutiny in Washington. Senator John Cornyn has raised concerns about Benchmark’s investment in the company, questioning whether American capital should support a Chinese-linked firm, as TechCrunch noted, citing Cornyn’s post on X.
Manus did not respond to a request for comment.
(Source: TechCrunch)