China Blocks Meta's Acquisition of AI Startup Manus Amid Rising Tech Tensions

China has officially blocked Meta's planned acquisition of the AI startup Manus, intensifying the scrutiny of foreign investments in domestic technology companies. The National Development and Reform Commission (NDRC) announced the prohibition without explicitly naming Meta, highlighting Beijing's growing concerns over US access to Chinese AI talent and intellectual property.

This move comes amid escalating geopolitical tensions between the US and China over advanced technology, with Washington imposing restrictions on Chinese firms' access to US chips. The decision to annul the deal raises questions about the future of cross-border AI collaborations and the broader impact on the global tech landscape.

Why China is Blocking Meta's AI Acquisition

China's National Development and Reform Commission (NDRC) cited domestic laws and regulations as the basis for prohibiting the foreign acquisition of Manus, a Singapore-based AI startup with Chinese roots. The move underscores Beijing's heightened vigilance over US acquisitions that could transfer cutting-edge AI technology and intellectual property out of China.

Manus specializes in general-purpose AI agents capable of performing complex tasks with minimal human input. The acquisition was seen as a strategic expansion for Meta's AI capabilities across its platforms, but China’s intervention reflects its intent to safeguard its technological advancements amid intensifying US-China tech rivalry.

The Complex Background of Manus and Meta's Deal

Meta announced the acquisition of Manus in December, marking a rare instance of a major US tech company purchasing an AI firm with strong Chinese connections. Manus had already shut down its China offices and relocated operations to Singapore following a $75 million fundraising round led by US venture firm Benchmark in May 2025.

This restructuring allowed Manus’s parent company, Butterfly Effect, to reincorporate in Singapore, effectively bypassing US investment restrictions on Chinese AI firms and Chinese regulations limiting domestic AI firms’ ability to transfer intellectual property and capital overseas.

Responses from Meta and the US Government

Meta responded to the NDRC's announcement by affirming that the transaction complied fully with applicable laws and expressed optimism for a suitable resolution. Meanwhile, a White House spokesperson emphasized the US administration's commitment to defending American technology innovation against undue foreign interference.

“The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.”—Meta spokesperson

“We will continue defending America’s leading and innovative technology sector against undue foreign interference of any sort.”—White House spokesperson

Implications for US-China Tech Relations and Future Outlook

China’s move to block the acquisition comes just weeks before a scheduled summit between US President Donald Trump and Chinese President Xi Jinping, highlighting the sensitive nature of technology transfers in the current geopolitical climate.

The decision signals a tougher stance by Beijing on foreign investments in strategic sectors like AI, potentially complicating future cross-border deals. It also reflects the broader contest between the US and China to dominate emerging technologies, with both sides imposing measures to protect their technological assets.

• Manus shut down China operations and moved to Singapore in 2025.
• The acquisition was expected to boost Meta’s AI offerings globally.
• China’s NDRC invoked domestic laws to block the deal.
• US government vows to protect American tech innovation.
• The move precedes a high-profile US-China summit in May 2026.