China's National Development and Reform Commission (NDRC) announced on Monday that it has vetoed Meta's proposed $2 billion acquisition of Manus, an AI startup initially founded by Chinese engineers and later relocated to Singapore. This decision represents a notable intervention by China in international business dealings, highlighting the complexities of U.S.-China relations within the rapidly evolving AI sector.
Without providing specific reasons, the NDRC mandated that both Meta and Manus retract the acquisition. The commission stated, "The National Development and Reform Commission has decided to prohibit foreign investment in the Manus project in accordance with laws and regulations, and has required the parties involved to withdraw the acquisition transaction."
The situation is further complicated as approximately 100 Manus employees have already transitioned to Meta's Singapore offices since March, with the company's founders taking on significant roles within Meta. Manus CEO Xiao Hong now reports directly to Meta's COO Javier Olivan. However, reports indicate that Hong and Chief Scientist Yichao Ji may be under exit bans, restricting their travel from mainland China.
A Meta spokesperson expressed confidence in the legality of the acquisition, stating, "The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry."
Founded in 2022 by Hong, Ji, and Tao Zhang, Manus moved its headquarters from China to Singapore in mid-2025. Meta's interest in the company culminated in the announcement of the acquisition in December 2025, with plans to integrate Manus's advanced agent technology into Meta AI.
While the acquisition aimed to sever ties with Chinese ownership and operations, Manus's origins in China have raised alarms in Washington. Concerns have been voiced regarding the implications of American investments in a company with Chinese connections, particularly by figures such as Senator John Cornyn.
As the landscape of AI continues to evolve, this decision by China not only impacts Meta's strategy but also sets a precedent for future international collaborations in technology sectors. The unfolding dynamics could redefine how companies navigate cross-border investments in the era of AI innovation.