China has blocked Meta Platforms' planned acquisition of artificial intelligence startup Manus, ordering the deal to be unwound after months of regulatory review and intensifying scrutiny of foreign investment in sensitive technology sectors.
The National Development and Reform Commission, China's top economic planning authority, said Monday it had prohibited the foreign acquisition and directed all parties to withdraw from the transaction.
The statement was issued through its foreign investment security review mechanism and did not directly name Meta, though the U.S. company had publicly confirmed the purchase, the Associated Press noted.
The move follows earlier regulatory action in which Chinese authorities opened a formal review of the deal, examining whether it complied with laws governing data security, technology exports, and cross-border acquisitions, according to Reuters. Officials did not provide detailed reasons for the final decision, but analysts note that Beijing has increasingly treated artificial intelligence firms as strategic national assets.
Meta announced the acquisition in December, valuing Manus at around $2 billion to $3 billion, based on industry estimates. The startup is known for developing a general-purpose AI agent capable of performing multi-step tasks autonomously, a technology seen as increasingly important in the next phase of generative AI development.
At the time of the deal, Meta said Manus would be integrated into its broader AI strategy across platforms such as Facebook and Instagram, with the aim of accelerating development of autonomous AI systems. The company also stated that Manus would discontinue operations in China and that no Chinese ownership interests would remain after the acquisition.
Manus, which originated from China-linked founders but later moved operations to Singapore through Butterfly Effect Pte, has been at the center of regulatory attention due to its cross-border structure. Reports have also indicated that Chinese authorities previously restricted key executives from leaving the country while the review was underway, highlighting the sensitivity surrounding the transaction, according to Financial Times coverage.
Meta responded to the latest decision by stating that the transaction had fully complied with applicable laws and expressed confidence that the issue would be resolved appropriately. A Meta spokesperson told CNBC that the transaction "complied fully with applicable law," adding that the company expected "an appropriate resolution to the inquiry."
Separately, APEC Senior Officials Meeting Chairman Chen Xu addressed questions on China's decision to block Meta's acquisition of Manus, telling reporters that it is "important that all parties act in a spirit of mutual benefit."
Analysts say these moves reflect a broader shift toward "tech sovereignty," where governments increasingly treat AI development as a matter of national security rather than purely commercial activity.
Industry experts also warn that the Manus case may have wider implications for future mergers involving AI startups with Chinese origins or operational ties. Lian Jye Su of Omdia said the ruling signals that China is prepared to treat AI capabilities as core strategic assets, and that similar deals could face heightened scrutiny going forward, according to Reuters.
