Key Takeaways
- China’s National Development and Reform Commission ordered Meta to unwind its $2 billion acquisition of AI startup Manus
- Beijing cited laws on export controls, technology import/export, and overseas investment in its January probe
- The ruling complicates unwinding: Manus employees have joined Meta, capital has been transferred, and investor proceeds already paid out
- The block is seen as a warning shot against “Singapore-washing”, where Chinese founders relocate to the city-state to sidestep regulatory scrutiny
- Meta previously told CNBC the transaction “complied fully with applicable law”
China’s top state planner has ordered Meta to unwind its $2 billion acquisition of agentic AI startup Manus, a surprise intervention that signals Beijing’s willingness to reach beyond its borders to block technology transfers to geopolitical rivals.
The National Development and Reform Commission issued a one-line notice Monday prohibiting foreign investment in Manus in accordance with laws and regulations, without elaborating. It instructed both parties to withdraw the transaction.
The deal had drawn scrutiny from both sides of the Pacific. U.S. lawmakers have prohibited American investors from directly backing Chinese AI companies. At the same time, Beijing has intensified efforts to discourage Chinese AI founders from relocating their businesses offshore, a practice critics call “Singapore-washing.”
Manus was founded in China before moving its headquarters and key staff to Singapore in 2025. The company develops general-purpose AI agents capable of executing tasks like market research, coding and data analysis.
Its March 2024 product launch drew comparisons to DeepSeek and helped the startup reach $100 million in annual recurring revenue within eight months, a claim Manus said made it the fastest startup in the world to hit that milestone from zero.
The Manus block is a clarifying moment. Manus was Singapore-incorporated with founders based here, and it still got pulled back. Beijing’s signal is that what matters isn’t where the legal entity sits. — Ke Yan, tech analyst, DZT Research
Manus raised $75 million in a round led by U.S. venture firm Benchmark in April last year. Investors including Tencent, ZhenFund and Hongshan have already received proceeds from the deal, according to people familiar with the matter.
Manus staffers have moved into Meta offices in Singapore, and the startup’s executives have joined Meta’s AI team.
It remains unclear how the companies would practically unwind a transaction that has largely been completed. Meta did not immediately respond to a request for comment following the NDRC’s ruling.
A spokesperson had previously told CNBC the acquisition “complied fully with applicable law” and that it anticipated “an appropriate resolution to the inquiry.”
For Meta, the block is a setback in its race to compete in AI agents against Microsoft, Google, OpenAI and Anthropic. The company had said it intended to integrate Manus’s automation capabilities into its consumer and enterprise products, including its Meta AI assistant.
The ruling arrives weeks before a high-profile summit between President Donald Trump and China’s Xi Jinping, adding a fresh friction point to already strained tech relations between the two countries.
APEC Senior Officials Meeting Chairman Chen Xu told reporters the situation would be helped if “all parties act in a spirit of mutual benefit,” though he said he did not know the specifics of the case.
The deeper question for China’s AI sector is what the NDRC’s reach means for founders who followed the Singapore playbook in good faith. If legal incorporation outside China no longer insulates a startup from Beijing’s authority, the calculus for Chinese AI entrepreneurs seeking global capital has shifted materially.
