China vetoes Meta’s $2B Manus deal after months-long probe
China has ordered Meta to unwind its multibillion-dollar Manus acquisition, dealing a potential setback to Zuckerberg’s push into AI agents.
China’s top economic planner, the National Development and Reform Commission (NDRC), said on Monday it has blocked Meta’s $2 billion acquisition of Manus, an agentic AI startup founded by Chinese engineers that relocated to Singapore before Mark Zuckerberg scooped it up late last year .
The move marks one of China’s most significant interventions in a cross-border deal, one that extends well beyond U.S.-China tensions and into the broader AI industry. For Meta, it could deal a serious blow to its ambitions in the fast-moving AI agents space.
With no explanation offered, China’s NDRC ordered both parties to unwind the deal entirely.
“The National Development and Reform Commission (NDRC) has made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations, and has required the parties involved to withdraw the acquisition transaction,” it said .
But the situation is far from straightforward. Around 100 Manus employees have already moved into Meta’s Singapore offices as of March, with founders taking on executive roles. CEO Xiao Hong now reports directly to Meta COO Javier Olivan . Manus CEO Hong and Chief Scientist Yichao Ji are reportedly under exit bans, preventing them from leaving mainland China.
“The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry,” a spokesperson at Meta told TechCrunch.
Founded in 2022 by Hong, Ji and Tao Zhang, Manus relocated its headquarters from China to Singapore around mid-2025. Just months later, Meta came knocking. The company announced its acquisition of Manus in December 2025 for roughly $2 billion to $3 billion, with plans to fold its agent technology directly into Meta AI.
Meta has agreed to acquire Singapore-based AI startup Manus, with the deal requiring a full exit from Chinese ownership and operations, per Nikkei Asia . But the company’s origins trace back to China. Manus’ founders previously established its parent company, Butterfly Effect, in Beijing in 2022 before relocating to Singapore. That background has drawn scrutiny in Washington, where Senator John Cornyn has already raised concerns about Benchmark’s investment in the company, questioning whether American capital should be flowing to a Chinese-linked firm, TechCrunch pointed out, citing Cornyn’s post on X .
Manus did not respond to TechCrunch’s request for comment.
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Kate Park is a reporter at TechCrunch, with a focus on technology, startups and venture capital in Asia. She previously was a financial journalist at Mergermarket covering M&A, private equity and venture capital.
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Key takeaways
- China's decision reflects geopolitical tensions impacting the global tech sector.
- The exit ban on Manus's founders may discourage international collaborations and affect the startup ecosystem.
- Meta needs to reassess its acquisition strategy in sensitive markets, considering potential regulatory blocks.
Editorial analysis
China's decision to block Meta's acquisition of Manus is a clear signal of the growing geopolitical tensions that permeate the technology sector, especially in the field of artificial intelligence. For Brazil, which seeks to position itself as a tech innovation hub, this situation highlights the importance of a regulatory environment that favors attracting international investments while also protecting local companies from potential repercussions of external policies. Meta, in trying to expand its AI operations, now faces a significant obstacle that could impact its development plans and integration of new technologies into its platform, which could have implications for the company's global competitiveness.
Moreover, Manus's situation raises questions about talent mobility and the retention of professionals in a landscape where regulation may limit the freedom of movement for executives. The fact that Manus's founders are under exit bans from mainland China may discourage other entrepreneurs and investors from engaging in cross-border collaborations, affecting the startup and innovation ecosystem. For Brazil, which has an emerging tech market, attracting talent and fostering international collaboration are essential for growth and innovation.
The scenario also suggests that Meta may need to reassess its acquisition and technology development strategy in sensitive markets. The NDRC's block may indicate that other companies looking to expand their operations in China or that have ties to the country should be prepared to face similar challenges. The situation requires ongoing attention, as Meta's reactions and Manus's responses could shape the future of trade relations between the U.S. and China, as well as influence the dynamics of the global AI sector.
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