China orders Meta unwind $2B deal
- China’s National Development and Reform Commission ordered Meta to unwind its $2 billion-plus purchase of Manus on April 27, reversing the December takeover. - Beijing said foreign investment in the Manus project was prohibited, after a January probe into export controls, overseas investment and technology transfer. - The ruling targets “Singapore-washing” by Chinese AI startups shifting offshore for U.S. capital. (cnbc.com)
China ordered Meta on April 27 to unwind its $2 billion-plus acquisition of Manus, an artificial intelligence startup founded in China and later moved to Singapore. (reuters.com) (cnbc.com) China’s National Development and Reform Commission said it would “prohibit foreign investment in Manus” and required the parties to withdraw the transaction. Reuters reported the order came four months after Meta announced the deal in December and days after Beijing opened a probe in January. (reuters.com) (cnbc.com) Manus had shut its China offices in July 2025 after a $75 million fundraising round led by Benchmark, then shifted operations to Singapore through parent company Butterfly Effect. CNBC said the startup had passed $100 million in annual recurring revenue in December. (reuters.com) (cnbc.com) The company builds general-purpose AI agents, software that can carry out multistep tasks like market research, coding and data analysis with limited human input. Meta said when it announced the acquisition that it wanted to use Manus technology in Meta AI and business tools. (cnbc.com) Beijing’s move shows China is asserting authority over deals involving Chinese founders, assets, shareholders or technology even after those companies reincorporate abroad. Reuters said lawyers now expect Chinese national security clearance to become a standard closing condition in cross-border tech deals. (reuters.com) The case also hits a model investors had been using to route Chinese startups through Singapore, hoping to avoid restrictions from both Beijing and Washington. CNBC said founders and venture capital firms had treated that relocation strategy as a way to keep access to U.S. money. (cnbc.com) Meta said in March that the transaction “complied fully with applicable law.” After the April 27 order, Reuters reported Meta was preparing to unwind the acquisition, citing a Wall Street Journal report. (cnbc.com) (reuters.com) That unwinding could be messy. Reuters said Beijing gave Meta and Manus a preliminary deadline of several weeks to reverse the deal, restore Manus’s Chinese assets and remove any data or technology already transferred. (reuters.com) The order leaves one of the year’s biggest artificial intelligence deals stuck between U.S. and Chinese rules, with both governments trying to keep advanced AI talent and technology from the other side. (reuters.com)
