Key Points
- Chinese regulators halted Meta’s planned purchase of AI startup Manus this Monday
- The December agreement valued Manus at over $2 billion
- Chinese authorities prevented Manus executives from departing the country in March amid regulatory scrutiny
- The NDRC mandated complete withdrawal from the acquisition by all involved parties
- The decision demonstrates Beijing’s strategy to restrict foreign control of Chinese AI technology
Meta Platforms had been accelerating its expansion in artificial intelligence agents. Last December, the social media giant unveiled plans to purchase Manus — an advanced AI agent developed by Butterfly Effect, a startup with Chinese origins that had relocated operations to Singapore.
According to analysts at Bloomberg Intelligence, the transaction exceeded $2 billion in value.
Manus garnered significant attention in early 2024 when Chinese government-backed media outlets dubbed it the nation’s answer to DeepSeek following its debut of what was marketed as the planet’s first comprehensive AI agent. The technology performs tasks including resume evaluation and automated stock analysis website construction.
However, industry observers immediately noted the transaction carried substantial regulatory hurdles due to escalating technological competition between Washington and Beijing.
Those predictions materialized.
Chinese Authorities Intervene
March brought a dramatic development. Manus executives Xiao Hong (CEO) and Ji Yichao (chief scientist) received orders to appear in Beijing, where authorities informed them they were prohibited from leaving Chinese territory during the regulatory assessment period. Both typically operate from Singapore.
This Monday, China’s National Development and Reform Commission issued its final verdict — the acquisition cannot proceed. The NDRC announced it would “prohibit the foreign investment in the acquisition of the Manus project” and required complete withdrawal by all transaction participants.
The regulatory body stated the determination followed “laws and regulations,” providing no additional explanation.
Industry experts are monitoring the situation carefully. Despite Manus having transferred its official headquarters from mainland China to Singapore — a strategic maneuver employed by numerous Chinese enterprises to minimize vulnerability to US-China friction — the relocation provided no safeguard.
According to Alfredo Montufar-Helu from Ankura China Advisors, the ruling demonstrates that restrictions previously concentrated on semiconductor technology are expanding into artificial intelligence. “Beijing is clearly signaling its determination to block international acquisition of assets deemed critical for national security — with AI now unambiguously included in that category,” he explained.
In December, Meta stated the transaction would “bring a leading agent to billions of people and unlock opportunities for businesses across our products.” The technology company has yet to issue a statement regarding Monday’s prohibition.
The NDRC’s decision may become a discussion point during the scheduled mid-May meeting between President Trump and President Xi Jinping.
Meta stock declined 2.41% following the announcement.
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