China’s top economic planner, the National Development and Reform Commission (NDRC), has stopped Meta’s proposed $2 billion acquisition of Manus, an AI startup focused on agent-based systems. Chinese engineers who founded the company but later moved its base to Singapore before Meta entered the deal.
The decision comes after months of review. The NDRC said it has ordered both companies to cancel the transaction. No detailed explanation was shared.
In its statement, the regulator said the deal is blocked under existing laws. It also instructed both sides to fully withdraw from the acquisition process.
Deal Ordered to Be Reversed Without Explanation
According to the NDRC, the foreign investment linked to Manus has been prohibited. The authority did not provide reasons for the decision. The move stands out as one of China’s stronger actions in a cross-border AI deal, raising attention in both tech and policy circles.
Meta had announced plans to acquire Manus in late 2025. The deal value was estimated between $2 billion and $3 billion. The intention was to integrate Manus’ AI agent technology into Meta AI systems.
Staff Already Working Inside Meta Offices
Reports suggest that around 100 Manus employees had already joined Meta offices in Singapore by March. Some senior figures also took on leadership roles inside Meta.
Manus CEO Xiao Hong is said to report directly to Meta COO Javier Olivan. At the same time, both Hong and Chief Scientist Yichao Ji are reportedly under exit restrictions in China, which prevent them from leaving the mainland.
A Meta spokesperson told reporters that the company believes the transaction followed all legal rules. Meta also said it expects a resolution to the ongoing review.
Manus Background and Ownership Questions
Manus was founded in 2022 by Xiao Hong, Yichao Ji, and Tao Zhang. Later, the company moved its headquarters from China to Singapore in mid-2025. Soon after the move, Meta entered negotiations.
The startup’s parent company, Butterfly Effect, was first based in Beijing. It was relocated before the Singapore shift. This background has drawn attention in the United States. Lawmakers have raised concerns about investments tied to firms with Chinese origins.
Growing Scrutiny Around AI Investments
The Manus case has also sparked debate in Washington. Some officials have questioned whether U.S. funding should go to companies with China-linked backgrounds. This includes firms that have already relocated.
Meta planned to strengthen its position in the fast-growing AI agents market. The blocked deal now adds uncertainty to that strategy.
For now, the acquisition remains halted. Both companies are expected to respond to the regulator’s decision. The wider industry is watching how the situation develops.
