China's state planner on Monday ordered Meta Platforms to unwind its $2 billion acquisition of Manus, a Singapore-headquartered artificial-intelligence startup with Chinese roots, killing a deal Meta announced late last year and freezing what had become the most-watched cross-border AI transaction in the market.
The National Development and Reform Commission said the prohibition on foreign investment was made in accordance with existing laws and regulations and asked the parties to withdraw the transaction. The ruling lands three months after China's Ministry of Commerce opened an assessment of how the purchase complied with rules covering export controls, technology transfer and overseas investment, and it closes off Meta's most direct route into the fast-growing market for general-purpose AI agents.
What the NDRC said
The agency disclosed the decision in a brief statement Monday in Beijing. It did not detail the security concerns behind the prohibition, citing only the laws and regulations that govern foreign investment review. Meta shares were 0.2 percent lower in U.S. premarket trading after the announcement, according to CNBC.
A Meta spokesperson told CNBC the transaction "complied fully with applicable law," and that the company anticipated "an appropriate resolution to the inquiry." The spokesperson did not say whether Meta would formally rescind the agreement or contest the order.
The target
Manus was founded in China before relocating to Singapore, a path other Chinese AI founders have followed to court foreign capital while distancing themselves from Beijing's tightening technology controls. The company builds general-purpose AI agents and released its first such product in March of last year, software that can carry out market research, write code and run data analysis on its own. The launch drew comparisons in Chinese tech circles to DeepSeek, the Hangzhou model maker that briefly upended global AI valuations in early 2025.
The startup said it crossed $100 million in annual recurring revenue in December, eight months after launching the agent, a pace it claimed made it the fastest company in the world to reach the mark from zero. Manus raised $75 million in April of last year in a round led by U.S. venture firm Benchmark.
Meta announced the acquisition late in 2025, saying it would use Manus to accelerate AI features for businesses and to integrate more advanced automation into its consumer and enterprise products, including the Meta AI assistant. The price tag valued the startup at roughly 20 times its trailing revenue.
Two capitals, one chokepoint
The deal had been pinned between two regulators from the moment it was disclosed. U.S. lawmakers have prohibited American investors from backing Chinese AI companies directly, and Beijing has stepped up efforts to keep Chinese AI founders from moving their businesses offshore. Manus, with its Singapore registration and Chinese engineering bench, sat squarely inside both screens.
Venture investors in China had watched the case as a test of what tech founders and bankers in the country call the "Singapore-washing" model, in which mainland-born companies redomicile in the city-state to escape scrutiny from Beijing and Washington. CNBC reported that Monday's ruling "drew alarm" among those founders and their backers.
On the diplomatic track
Asked about the decision, APEC Senior Officials Meeting Chairman Chen Xu told reporters that it is "important that all parties act in a spirit of mutual benefit." Chen said he did not know the specifics of the case but added that "if such an issue can be handled properly, it can help facilitate more substantive discussions in APEC," according to an official English translation of the Chinese.
The NDRC's order arrives three days after Meta told employees it would cut roughly 8,000 jobs, about 10 percent of its workforce, with departures starting May 20, and forecast capital spending of as much as $135 billion this year, the bulk of it directed at AI infrastructure. Chief Executive Mark Zuckerberg has framed that buildout as a push toward what the company calls personal superintelligence; the Manus acquisition was to be one of its first sizable bolt-ons.
The counter
Meta's contention that the deal complied with the law leaves open a narrow path to revival. The NDRC asked the parties to withdraw the transaction rather than declaring it void, language that under Chinese practice can leave room for a restructured offer with divestitures, licensing carve-outs or a Chinese co-investor. Whether Meta has the appetite to pursue that route, after a January commerce-ministry probe and a public prohibition from the state planner, is unclear. The company has not said.
China's regulators have at times reversed course on cross-border deals when foreign acquirers accepted behavioral remedies, though no such accommodation has been signaled for AI assets since the country tightened its outbound technology rules.
What comes next
The immediate question is whether Manus's earlier U.S. backers, including Benchmark, will face renewed pressure under Washington's outbound-investment regime now that Beijing has formally classified the company as off-limits to foreign control. The next scheduled forum at which the case is likely to surface is the APEC senior officials' meeting Chen chairs, which is expected to take up cross-border technology rules later this quarter.