China’s top economic regulator has effectively killed Meta’s $2 billion acquisition of Manus, the autonomous AI startup that recently captured Silicon Valley's imagination. The National Development and Reform Commission (NDRC) invoked its 2020 Foreign Investment Security Review Measures to prohibit the deal, marking the first time Beijing has used these powers to publicly block a major international takeover in the artificial intelligence sector. This decision forces a total withdrawal of the transaction, which would have been the third-largest acquisition in Meta’s history.
The target of the acquisition, Manus, represents a shift in AI technology from conversational chatbots to 'AI Agents' capable of autonomous task execution. Founded by Chinese entrepreneur Xiao Hong and his team in Wuhan, the startup’s flagship product can independently conduct research, write code, and build entire websites from natural language prompts. This high-utility performance led to a staggering 142-fold increase in valuation over three years, attracting high-profile users such as Mark Zuckerberg and former Y Combinator CEO Michael Seibel.
In a move reflecting the increasingly bifurcated tech landscape, Manus attempted to distance itself from its Chinese origins in mid-2025 by relocating its headquarters to Singapore. This migration was driven by the need for high-end GPU clusters and the requirements of U.S. venture capital firm Benchmark, which led a $75 million funding round. As U.S. regulations tightened around cross-border investments involving Chinese tech, the founders perceived Singapore as a necessary 'safe harbor' for global expansion and capital access.
However, Beijing’s recent intervention demonstrates that relocation does not grant immunity from Chinese regulatory oversight. Despite Manus clearing its Chinese social media presence and geoblocking domestic users, the NDRC maintained that the sale of the technology to a U.S. giant posed a national security risk. The move underscores China’s determination to keep its premier AI intellectual property from being absorbed by American Big Tech, even if the companies in question have already physically departed the mainland.