China moves to block Meta’s takeover of AI startup Manus

China has stepped in to halt the proposed acquisition of artificial intelligence startup Manus by US technology group Meta, underscoring growing scrutiny over foreign involvement in advanced domestic technologies.

The country’s National Development and Reform Commission (NDRC) announced on Monday that it would prohibit the foreign takeover of Manus, although it did not explicitly name Meta.

Al Jazeera reported that the intervention reflects rising concern in Beijing about the transfer of Chinese-developed AI expertise and intellectual property to overseas buyers, particularly from the United States.

The legal basis for overturning the deal remains unclear, especially given that Manus is headquartered in Singapore. It is also uncertain how regulators would unwind a transaction that has already been completed.

Manus, originally founded with Chinese ties but now operating from Singapore, develops general-purpose AI agents capable of carrying out complex tasks with minimal human input. The company has positioned itself as a player in next-generation automation tools.

In a brief statement, the NDRC said its decision was made in accordance with national laws and regulations. Meta, headquartered in California, responded by stating that the acquisition complied with all relevant legal requirements and that it expected a satisfactory outcome following discussions with regulators.

The dispute has drawn attention in Washington as well. A spokesperson for the White House said the US administration would continue to protect American technology firms from what it described as inappropriate foreign interference.

Meta first revealed plans to acquire Manus in December, in what was seen as an unusual move by a major US technology company to purchase an AI business with strong links to China. The acquisition was expected to bolster Meta’s artificial intelligence capabilities across its platforms.

At the time, Meta said the deal would eliminate any ongoing Chinese ownership in Manus and that the company would cease its operations within China.

However, Chinese authorities indicated in January that they would review whether the acquisition aligned with domestic regulations. The scrutiny followed a series of restructuring steps by Manus. After raising $75 million in a funding round led by US venture capital firm Benchmark in May 2025, the company shut its offices in China and laid off staff before shifting operations to Singapore.

This relocation allowed its parent company, Butterfly Effect, to re-establish itself outside China, potentially avoiding both US investment restrictions on Chinese AI firms and Chinese controls on the overseas transfer of technology and capital.

China’s attempt to block the deal comes shortly before a planned summit in Beijing between US President Donald Trump and Chinese President Xi Jinping in mid-May, adding another layer of tension to an already complex technological rivalry between the two countries.The intervention reflects rising concern in Beijing about the transfer of Chinese-developed AI expertise and intellectual property to overseas buyers, particularly from the United States.

The legal basis for overturning the deal remains unclear, especially given that Manus is headquartered in Singapore. It is also uncertain how regulators would unwind a transaction that has already been completed.

Manus, originally founded with Chinese ties but now operating from Singapore, develops general-purpose AI agents capable of carrying out complex tasks with minimal human input. The company has positioned itself as a player in next-generation automation tools.

In a brief statement, the NDRC said its decision was made in accordance with national laws and regulations. Meta, headquartered in California, responded by stating that the acquisition complied with all relevant legal requirements and that it expected a satisfactory outcome following discussions with regulators.

The dispute has drawn attention in Washington as well. A spokesperson for the White House said the US administration would continue to protect American technology firms from what it described as inappropriate foreign interference.

Meta first revealed plans to acquire Manus in December, in what was seen as an unusual move by a major US technology company to purchase an AI business with strong links to China. The acquisition was expected to bolster Meta’s artificial intelligence capabilities across its platforms.

At the time, Meta said the deal would eliminate any ongoing Chinese ownership in Manus and that the company would cease its operations within China.

However, Chinese authorities indicated in January that they would review whether the acquisition aligned with domestic regulations. The scrutiny followed a series of restructuring steps by Manus. After raising $75 million in a funding round led by US venture capital firm Benchmark in May 2025, the company shut its offices in China and laid off staff before shifting operations to Singapore.

This relocation allowed its parent company, Butterfly Effect, to re-establish itself outside China, potentially avoiding both US investment restrictions on Chinese AI firms and Chinese controls on the overseas transfer of technology and capital.

China’s attempt to block the deal comes shortly before a planned summit in Beijing between US President Donald Trump and Chinese President Xi Jinping in mid-May, adding another layer of tension to an already complex technological rivalry between the two countries.