China orders Meta to unwind Manus
- China’s top economic planner ordered Meta on Monday to unwind its completed acquisition of Manus, a Singapore-based artificial intelligence startup with Chinese roots. - The deal was worth more than $2 billion, and Reuters reported Manus co-founders Xiao Hong and Ji Yichao were later barred from leaving China. - Beijing is tightening checks on offshore AI restructurings and U.S. investment in frontier tech. (reuters.com)
China ordered Meta on Monday to unwind its completed acquisition of Manus, an artificial intelligence startup based in Singapore but founded in China. (reuters.com) (cnbc.com) The order came from the National Development and Reform Commission, which said foreign investment in Manus was prohibited and the parties had to withdraw the transaction. (reuters.com) (npr.org) Meta announced the deal in December 2025 at a value of more than $2 billion, and China’s commerce ministry opened an investigation in January 2026. Meta said in March, and again on Monday, that the transaction complied with applicable law. (reuters.com) (cnbc.com) Manus builds general-purpose AI agents, software that can carry out multistep jobs such as research, coding and data analysis with limited human prompting. Meta had planned to use that technology across Meta AI and its business products. (cnbc.com) (npr.org) China rarely forces completed corporate deals to be reversed, which made Monday’s order unusually direct. Reuters reported Beijing is trying to stop U.S. companies from acquiring Chinese AI talent and intellectual property. (reuters.com) The case also hits a structure investors had been using to move Chinese startups offshore. CNBC reported founders and venture capital firms had viewed Singapore relocations as a way to reduce scrutiny from both Beijing and Washington. (cnbc.com) Reuters reported Manus raised $75 million in a round led by Benchmark in May 2025, shut its China offices in July, and moved operations to Singapore without Chinese regulatory approval. That let parent company Butterfly Effect re-incorporate in Singapore, according to people familiar with the matter cited by Reuters. (reuters.com) Reuters also reported that Manus co-founders Xiao Hong and Ji Yichao were summoned to Beijing in March for talks with regulators and later barred from leaving China. Neither co-founder responded to Reuters requests for comment. (reuters.com) The immediate legal path is still unclear because the acquisition involved a Singapore-incorporated company that Meta had already bought. But Beijing’s order puts one of the highest-profile cross-border AI deals of the past year into limbo. (reuters.com)
