Catenaa, Monday, April 27, 2026- China has decided to block Meta’s plan to acquire the agentic AI startup Manus for $2 billion in a surprise move to unwind a controversial deal.
The National Development and Reform Commission ordered the deal’s cancellation in a brief statement on Monday.
The powerful state planner said in a one-line notice that it has decided to prohibit foreign investment in the startup in accordance with laws and regulations, without elaborating.
The ruling is likely to send a chill through China’s burgeoning AI sector, and emerged weeks before a high-profile summit between US President Donald Trump and China’s Xi Jinping.
Beijing has tightened scrutiny of key industry firms in the wake of the deal, which has largely been completed. The sale was initially hailed as a template for startups with global aspirations, but domestic critics have since lamented the loss of valuable technology to a geopolitical rival.
Manus’s founders got their start in China but relocated their headquarters and key staff to Singapore in 2025. It wasn’t clear when the deal was announced in December whether Beijing would exert its authority on a transaction that technically took place beyond its borders.
The decree on Manus may deal a setback to Meta as it looks to compete in AI against rivals from Microsoft and Alphabet’s Google to OpenAI and Anthropic.
Manus was supposed to help Meta leapfrog into a leading position in the hot sphere of AI agents, or services that use artificial intelligence to execute tasks.
Still, it’s unclear how Meta would unwind the deal. Manus employees have joined Meta, capital has been transferred, and the startup’s executives have joined the US firm’s rapidly expanding AI team.
Manus staffers have already moved into Meta offices in Singapore, while investors including Tencent Holdings, ZhenFund, and Hongshan have received their proceeds, Bloomberg News reported.
Meta said in a statement that the deal complied with applicable laws and expected a resolution to China’s investigation, without elaborating.
The company’s shares were little changed after trading got underway in New York.
Beijing’s regulators have wielded outsized power for years, forcing top executives at companies like Alibaba Group Holding and Tencent Holdings to reform their business practices with little resistance.
Perhaps the closest parallel to the Manus move was Beijing’s decision to compel its leading ride-hailing player, Didi Global, to delist from the New York Stock Exchange shortly after its initial public offering in 2021.
Once hailed as the Uber of China, the Beijing-based company hasn’t been able to relist since and has a market valuation of about $17 billion.
Beijing and Washington are jockeying for leverage ahead of their historic meeting in May.
As rivalry heats up in the AI space, Xi is trying to both fence off China’s top technology and talent from the US, while underscoring his growing confidence in the development of homegrown semiconductors.
