China Stops Meta’s $2 Billion Purchase of AI Startup Manus

China has ordered Meta to cancel its planned $2 billion acquisition of artificial intelligence startup Manus, creating fresh uncertainty around international technology investments involving Chinese-founded companies.

The decision was announced by China’s National Development and Reform Commission (NDRC), which stated that the deal would not be allowed under current foreign investment regulations. Officials instructed both Meta and Manus to withdraw the transaction and stop the acquisition process.

Meta had revealed the takeover plan in December 2025, saying the company wanted to strengthen its artificial intelligence systems and improve advanced AI tools across its consumer and business platforms. The company aimed to use Manus technology to expand AI-powered automation and improve its Meta AI assistant.

Manus is a fast-growing AI startup based in Singapore but originally founded by Chinese entrepreneurs. The company focuses on building general-purpose AI agents that can complete difficult tasks such as software coding, research, business analysis, and workflow management.

The startup became widely known after launching its first AI agent platform and was quickly seen as one of the most promising names in the global AI market. Many in the industry compared its rapid growth to other major AI companies such as DeepSeek.

Although Manus operates from Singapore, it has strong Chinese roots, including its founding team and business connections. This structure attracted attention because many Chinese startups have moved operations to Singapore to avoid tighter restrictions from both Chinese and American regulators.

This trend is often described as shifting business overseas to gain easier access to foreign investment while reducing political and legal pressure from both sides.

The Meta-Manus deal quickly came under review from regulators in both countries. In the United States, lawmakers have increased limits on direct investment in Chinese AI businesses. At the same time, China has strengthened efforts to keep important AI companies and top technical talent from moving abroad.

In January 2026, Chinese authorities launched an official investigation into whether the acquisition followed national rules related to overseas investment, technology transfer, and export control laws.

Meta had earlier said the transaction followed all legal requirements and expected the matter to be resolved properly. However, China’s latest decision has now forced the company to step back from the agreement.

Reports suggest that reversing the deal may not be simple because the two companies had already started working closely together. Some Manus employees were reportedly already collaborating with Meta teams in Singapore.

The decision has also raised concerns among startup founders and investors who were hoping to use Singapore as a safer base for building international technology companies while keeping strong business links with China.

Manus had shown impressive business growth, reportedly reaching more than $100 million in annual recurring revenue within just eight months of launching its main product. The company also raised major funding from U.S.-based venture capital firm Benchmark.

Experts believe this move shows that China wants stronger control over the future of artificial intelligence and is becoming more protective of valuable technology and talent.

The blocked Meta-Manus deal may become an important example of how politics and regulation are changing the future of global AI business partnerships.