China has blocked Meta's attempt to acquire one of the world's most prominent artificial intelligence startups, citing national regulations and escalating US-China tech tensions. The National Development and Reform Commission (NDRC) announced on Monday that it would prohibit foreign investment in Manus, the Singapore-based but China-founded AI company, and required the parties to unwind the transaction.
Background of the Blocked Deal
The $2 billion acquisition, announced by Meta in December 2025, was intended to supercharge the tech giant's AI ambitions. Meta, which owns Facebook and Instagram, had described the purchase as a logical step to scale world-class AI products. However, Chinese authorities moved to block the deal, aiming to prevent US firms from acquiring local talent and intellectual property.
Manus: A Pioneering AI Agent
Manus first gained global attention last year after its researchers claimed to have developed the world's first fully autonomous AI agent. The general-purpose AI was designed to carry out tasks independently, from booking holidays to developing video games. Co-founder Yichao Ji described it as the next evolution of AI, bridging the gap between conception and execution. Within a week of its unveiling, it attracted a waiting list of over 2 million people.
Victor Mustar, head of product at AI platform Hugging Face and an early user, called Manus "mind blowing," stating it was the most impressive AI tool he had ever tried. The user experience, he noted, delivered on promises that others had only made.
Regulatory and Legal Implications
Last month, co-founders Yichao Ji and Xiao Hong were blocked from leaving China while regulators reviewed the acquisition. Meta had previously stated that the acquisition complied fully with applicable law. The NDRC's ruling now requires the parties to withdraw the transaction. The Independent has reached out to Meta for comment on whether it plans to contest the decision.
This development underscores the growing tensions between the US and China over AI technology, as both nations seek to protect their domestic innovations and prevent the outflow of critical know-how.
