China blocks Meta’s $2 billion acquisition of AI startup Manus – Tech Digest

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China has officially ordered Meta to scrap its $2 billion acquisition of the AI startup Manus, marking a dramatic escalation in the battle for AI supremacy.

China’s National Development and Reform Commission (NDRC) prohibited the transaction on Monday, directing both parties to withdraw the deal immediately.

While Meta had intended to use the Singapore-based startup to scale its autonomous AI agents across its global platforms, Beijing’s intervention highlights the increasing difficulty Western tech giants face when attempting to acquire high-value assets with Chinese ties.

The deal, which was first announced in December, had already drawn intense scrutiny from regulators on both sides of the Pacific. Manus was originally founded in China before relocating to Singapore, a move intended to bypass the geopolitical friction between Washington and Beijing.

However, the NDRC’s ruling proves that simply moving headquarters offshore is no longer a guaranteed shield against Chinese regulatory reach. Manus had become a highly sought-after target after achieving $100 million in annual recurring revenue just eight months after launching its flagship product, which can handle complex coding and data analysis tasks independently.

Blow to Meta 

This regulatory block creates a massive logistical headache for Meta, which had already begun deeply integrating Manus’s engineering team into its core operations. A Meta spokesperson maintained that the acquisition fully complied with all applicable laws and stated that the company remains hopeful for an appropriate resolution.

Despite this optimism, the reality on the ground appears far more restrictive. Reports from earlier this year indicated that the startup’s co-founders were previously barred from leaving China, signalling that Beijing viewed the loss of this specific intellectual property as a threat to its national “innovation lab” status.

The collapse of the deal also serves as a warning to the venture capital community and other startups attempting “Singapore-washing” to attract American investment. As Washington continues to restrict US capital from flowing into Chinese AI firms, Beijing is countering by ensuring its most promising talent remains within its sphere of influence.

This tit-for-tat regulatory environment suggests that the “spirit of mutual benefit” often cited by international trade officials is being rapidly replaced by a new era of technological protectionism, where AI talent and data are guarded as closely as physical territory.

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