Meta Platforms’ planned acquisition of Manus AI has turned into a complex global story involving business strategy, regulation and national security concerns. The $2 billion deal, first announced in December 2025, was positioned as a major step in building advanced AI systems. However, in the months that followed, Chinese regulators began reviewing the transaction, raising concerns about technology transfer and foreign control. By April, authorities in China had moved to block the deal, asking both companies to cancel the transaction. The development has added to growing tensions between the US and China over artificial intelligence and control of advanced technologies.
Meta-ManusAI deal announced in December 2025
The announcement that Manus would join Meta was presented as a step to expand AI capabilities across Meta’s products. The company said Manus had developed a general-purpose AI agent that can perform tasks such as research, coding and data analysis.Meta said it planned to continue offering Manus as a service while also integrating it into its own platforms. The goal was to scale the technology to serve millions of businesses and users across its ecosystem.Manus also confirmed that it would continue to operate its subscription services and maintain its base in Singapore. The company said the move would not affect existing users or how the product works.Meta’s Manus AI acquisition ranked behind only its $19 billion purchase of WhatsApp in 2014 and its up to $15 billion investment in Scale AI in early 2025. Manus has a staff of around 100 employees and it was once hailed as the ‘next DeepSeek’. Manus CEO Xiao Hong then said “Joining Meta allows us to build on a stronger, more sustainable foundation without changing how Manus works or how decisions are made”. “We’re excited about what the future holds with Meta and Manus working together and we will continue to iterate the product and serve users that have defined Manus from the beginning.”Meta said: “We are excited to announce that Manus is joining Meta to bring a leading agent to billions of people and unlock opportunities for businesses across our products.Manus has built one of the leading autonomous general-purpose agents that can independently execute complex tasks like market research, coding, and data analysis. We will continue to operate and sell the Manus service, as well as integrate it into our product”.
What Manus AI does
Manus gained attention earlier in 2025 after launching what it described as a general AI agent. The system is designed to carry out complex tasks independently, including research, automation and analysis. The company said its platform has already processed more than 147 trillion tokens and helped create over 80 million virtual computers. These numbers were used to highlight the scale at which the technology is being used.The concept of AI agents is becoming a key area for tech companies, as they aim to build systems that can complete tasks without direct human input.
China begins review of Meta-Manus deal
Soon after the deal was announced, Chinese authorities began examining the transaction. Reports said regulators were checking whether the acquisition followed rules related to foreign investment and technology transfer.The review was led by the National Development and Reform Commission (NDRC), which is China’s top economic planning body. Officials were concerned that the deal could lead to the transfer of advanced AI technology to a foreign company. The commission then said it is assessing the deal under national security concerns and its adherence to local regulations governing technology transfer and foreign investments.The scrutiny reflects a broader trend in China, where regulators are closely monitoring deals involving sensitive technologies such as artificial intelligence.
Manus founders questioned, travel restricted
In March 2025, Financial Times reported that Manus co-founders Xiao Hong and Ji Yichao were called for meetings with Chinese officials. They were reportedly asked questions about the deal and its implications.The report also said that both founders were not allowed to leave the country while the review was ongoing. No formal charges were filed, and the investigation continued. This step signaled the seriousness with which Chinese authorities were treating the case.
China blocks the acquisition
By April, the situation had escalated further. Chinese regulators ordered both Meta and Manus to cancel the deal. The decision followed a review of national security concerns and compliance with export control rules.Officials were concerned that the deal could lead to the loss of key technology developed in China. Manus, while registered in Singapore, has roots in mainland China, with core development work carried out in cities like Beijing and Wuhan. Authorities reportedly viewed the company’s move to shift operations abroad as a possible attempt to transfer technology out of the country.Manus became a tech sensation in early 2025 after releasing what it called the world’s first “general AI agent”, a software which is capable of completing complex tasks on a user’s behalf. While Manus is officially registered in Singapore, its roots are firmly in mainland China. The company’s core technology was developed by teams in Beijing and Wuhan.However, in mid-2025, the startup began moving its operations to Singapore and shutting down its Chinese social media presence. Beijing’s regulators reportedly feared this move was a blueprint for “technology leakage,” where homegrown Chinese innovation is quietly moved abroad to be acquired by American giants like Meta.Previous reports from the Financial Times and The New York Times claimed that the co-founders of Manus were summoned to meetings with Chinese officials in March and have since been barred from leaving the country.Meanwhile, China has been tightening its grip on technology exports since 2020, specifically targeting algorithms. This is said to be ‘tit-for-tat’ response after the US pressured ByteDance to sell TikTok’s American operations, and previously blocked sale of Nvidia’s high-end AI chips.
China gives Mark Zuckerberg’s Meta deadline to abort Manus deal
The Chinese government has handed Mark Zuckerberg’s Meta a deadline to undo its $2.5 billion acquisition of AI startup Manus, citing national security concerns. Citing sources familiar with the matter, a report by The Wall Street Journal claimed that Beijing has given the tech giant just a few weeks to completely “disentangle” itself from the startup and return its assets to their original state.The report claimed that the order from the National Development and Reform Commission (NDRC) marks a dramatic intervention in a global tech deal in which Meta acquired the Singapore-based, China-linked Manus in December to bolster its “AI agent” capabilities.
What it means to ‘unwind’ deal
Since December, Meta has already integrated Manus’s advanced AI technology into its own systems. Beijing’s order specifically requires Meta to remove any previously transferred technology or data from Meta’s servers, fully return all Chinese assets to their original condition, and allow the startup’s founders to depart Meta as part of the rescission.According to the WSJ report, compounding the problem is the money. Major investors, including California’s Benchmark, have already received their financial returns from the $2.5 billion sale. This means that disentangling the finances of a closed deal involving international venture capital could lead to significant legal hurdles.
Meta’s strategy and the importance of the deal
For Meta, the Manus acquisition was part of a larger plan to strengthen its position in artificial intelligence. The company has been investing heavily in AI, including tools that can automate tasks and improve user experiences. As mentioned above, the Manus deal was among the largest in Meta’s history, following its earlier acquisition of WhatsApp. It was also seen as a way for Meta to compete with other tech companies working on AI systems.The company has not issued detailed comments after the block, but the development is seen as a setback for its plans.
Rising global tensions over AI
The Manus case comes at a time when the US and China are taking stronger positions on technology control. Both countries are introducing policies to limit the flow of advanced technology to each other.China has tightened its export rules, while the US has introduced measures to restrict investment in certain sectors. These steps are part of a broader effort to secure leadership in artificial intelligence.The White House has also raised concerns about foreign access to US technology, while China has warned about risks to its own innovations. Last week, the White House issued an urgent directive to government agencies, accusing China of running a massive, state-sponsored campaign to steal American artificial intelligence (AI) technology. In a memo, written by Michael Kratsios, Director of the White House Office of Science and Technology Policy, the Trump administration claimed that foreign entities – primarily based in China – are engaged in “industrial-scale” efforts to copy and dismantle the United States’ most advanced AI systems.
A sign of changing global tech landscape
The blocked deal shows how technology, business and geopolitics are becoming closely linked. As artificial intelligence becomes more important, governments are taking a more active role in controlling how it is developed and shared. The Manus case is likely to be seen as an example of how such deals can face challenges, even after being announced.It also highlights the growing importance of AI agents and the competition among companies to build systems that can handle complex tasks.As the global tech industry continues to evolve, similar cases may become more common, especially in sectors that are seen as critical for future growth.
What is “Singapore washing”
The Manus-Meta case is being seen as a key example of how ‘Singapore washing’ may no longer work for Chinese and American companies. For those unaware, “Singapore washing” is a strategy used by some startups with Chinese roots to move their headquarters to Singapore, as explained in a CNBC report. Relocating headquarters to Singapore allows companies to attract global investors and operate with less direct scrutiny from Chinese and US regulators.
Manus had followed a similar path. The AI firm relocated its base and core operations to Singapore while continuing to build its technology with links to China. The approach has been popular among founders looking to access international funding while managing regulatory risks.
Scrutiny signals limits of offshore structures
The CNBC report said China’s response to the Manus deal shows that authorities are now focusing more on where technology is developed, rather than where a company is officially registered. Chinese regulators reportedly restricted the company’s founders from leaving the country and began examining the deal soon after it was announced.Experts cited in the report said this could mark a shift for startups that relied on offshore structures. Investors and founders are now reassessing their strategies as both China and the US increase oversight of AI companies. As per the report, some founders may now choose to build companies outside China from the beginning, instead of moving later.
What lies ahead
It remains unclear whether Meta and Manus will attempt to revise the deal or explore alternative arrangements, although reports suggest Meta has started preparing to ‘unwind’ the deal. The situation is still developing, and both companies may need to adjust their strategies. The case is likely to influence how future deals are structured, especially in sectors like AI where technology is closely linked to national security.For now, the blocked acquisition serves as an example of how global business, technology and policy are increasingly connected.
