Beijing, representing the Chinese government, has moved to prevent Meta’s $2 billion acquisition of AI startup Manus, signaling Beijing’s apprehension over critical technology falling into US hands amid escalating tech warfare.
The nation’s state planner issued a brief statement on Monday, mandating both parties to unwind the transaction following an inquiry into the purchase that Beijing initiated earlier this year.
This action, which is anticipated to have a chilling effect on AI startups within China, occurred merely weeks shy of a highly anticipated summit between US President Donald Trump and Chinese leader Xi Jinping in Beijing. The two sides are expected to address various points of contention, spanning from trade deficits to control over advanced technologies.
The decision from Beijing exacerbates the fragmentation of the worldwide technological landscape, set against a backdrop of heightened US-China tensions. It underscores the increasingly complicated environment for cross-border investments in vital sectors such as artificial intelligence and semiconductors.
In practice, however, nullifying the deal presents significant hurdles. Shortly after the acquisition was announced late last December, Meta had already incorporated Manus into its internal operations, and the startup’s executive team had joined the US tech giant.
For Meta, having the acquisition blocked means missing an opportunity to bolster its AI capabilities precisely as the technological contest intensifies against rivals like Google and OpenAI.
In response to Beijing’s directive, a Meta spokesperson informed CNN that the transaction was “fully compliant with applicable laws.”
“We anticipate the conclusion of the relevant investigation,” the individual added, without detailing the company’s intended approach to resolving the matter with Beijing.
CNN reached out to Manus for comment.
Manus originated in China and caused a significant stir in the industry when it launched its AI agent—a system capable of operating autonomously on behalf of the user—last March. For many in China, the emergence of a homegrown, high-performing agent-based AI startup was a source of significant national pride.
However, public sentiment soured after the startup relocated its headquarters and the bulk of its operations to Singapore, and even more so following the announcement of its sale to Meta.
On Chinese social media platforms, some decried the sale as “treacherous” and accused the company of “selling out” to the US, which has implemented sweeping export controls aimed at slowing China’s progress in areas like advanced AI.
In an unusually swift move, Beijing launched an investigation into the acquisition in January, seeking to deter other Chinese tech startups from pursuing similar strategies. It remains unclear whether authorities plan to announce further steps in their probe.
Nevertheless, analysts have previously cautioned that a harsh reaction from Beijing, such as voiding the acquisition, could discourage entrepreneurs with global aspirations and potentially prompt talented individuals to establish their ventures abroad from the very beginning.
Last month, the Financial Times reported that Beijing had barred Manus’s two co-founders, Xiao Hong and Ji Yichao, from leaving the country while the investigation remains active.
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