China’s National Development and Reform Commission (NDRC) announced on Monday the cancellation of Meta’s $2 billion acquisition of Manus, an AI startup founded by Chinese engineers that moved to Singapore before the deal was proposed. This action represents one of China’s most notable interventions in cross-border acquisitions, highlighting the ongoing complexities between U.S.-China relations and the global AI landscape.
The NDRC has not provided a detailed rationale for its decision, but it mandated both Meta and Manus to completely revoke the acquisition. According to the commission, this prohibition aligns with existing laws and regulations regarding foreign investment in the Manus project.
The situation is complicated, as approximately 100 employees from Manus have already joined Meta’s offices in Singapore since March, and the founders have taken executive positions within Meta. Notably, Manus CEO Xiao Hong now reports directly to Meta’s COO, Javier Olivan. Reports suggest that both Hong and Chief Scientist Yichao Ji may be subject to travel bans preventing them from leaving mainland China.
A spokesperson from Meta asserted that the transaction adhered to applicable laws and expressed optimism about resolving the situation appropriately.
Founded in 2022 by Hong, Ji, and Tao Zhang, Manus relocated its headquarters to Singapore in mid-2025, shortly before Meta’s acquisition announcement in December 2025, which was valued between $2 billion and $3 billion. Meta’s intention was to integrate Manus’s advanced AI technology directly into its operations. Following the acquisition news, it was revealed that Manus would need to sever all ties to Chinese ownership and operations.
Despite Manus’s new base in Singapore, its founders have strong ties to China, having established its parent company, Butterfly Effect, in Beijing. This background has sparked scrutiny, particularly among U.S. lawmakers. Senator John Cornyn has raised concerns about U.S. investments in companies with links to China, suggesting that American capital shouldn’t flow into such firms.
As of now, Manus has not responded to any inquiries related to the situation, leaving the future of the startup and its acquisition by Meta uncertain amidst these geopolitical and regulatory tensions.
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