China's National Development and Reform Commission has blocked Meta's roughly $2 billion acquisition of Manus, an agentic AI startup founded by Chinese engineers that moved to Singapore before Mark Zuckerberg announced the deal in December 2025. The NDRC said on Monday it has prohibited foreign investment in the Manus project and ordered both sides to withdraw the transaction. Reporting from Nikkei Asia previously pegged the deal value between $2 billion and $3 billion. It is one of Beijing's most assertive interventions in a cross-border AI deal to date.
The veto lands after Meta has already integrated much of Manus into its operations. Around 100 Manus employees had moved into Meta's Singapore offices by March 2026, with the founders taking executive roles inside the parent company. CEO Xiao Hong now reports directly to Meta COO Javier Olivan, according to TechCrunch's Kate Park.
The complication is that Hong and Chief Scientist Yichao Ji are reportedly under exit bans, preventing them from leaving mainland China. That leaves Meta's most senior Manus hires physically separated from the team they were brought in to lead.
Key facts
- 01China's NDRC ordered Meta and Manus to unwind a $2B acquisition announced in December 2025.
- 02The deal was valued between $2B and $3B and would have folded Manus agents into Meta AI.
- 03About 100 Manus employees had already relocated to Meta's Singapore offices by March 2026.
- 04Manus CEO Xiao Hong and Chief Scientist Yichao Ji are reportedly under exit bans in mainland China.
- 05Senator John Cornyn previously questioned Benchmark's investment in the China-linked firm.
"The National Development and Reform Commission (NDRC) has made a decision 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 agency said. The NDRC offered no further explanation.
“Around 100 Manus employees had already moved into Meta's Singapore offices by March, with CEO Xiao Hong reporting directly to Meta COO Javier Olivan.”— Jaeden Schafer
Meta is pushing back. "The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry," a Meta spokesperson told TechCrunch. The company has not said how it plans to handle the staff already on its Singapore payroll if the deal is formally unwound.
Manus was founded in 2022 by Hong, Ji and Tao Zhang under the parent company Butterfly Effect, originally based in Beijing. The team relocated its headquarters to Singapore around mid-2025, and Meta announced the acquisition just months later in December 2025. The plan was to fold Manus's agent technology directly into Meta AI, giving Zuckerberg's assistant a more capable autonomous layer at a moment when agents have become the central battleground in consumer AI.
The deal was always going to be politically sensitive on two fronts. In Washington, Senator John Cornyn had already raised concerns about Benchmark's investment in Manus, questioning whether US venture capital should be flowing to a firm with Chinese roots. In Beijing, regulators appear to have decided that allowing a US tech giant to absorb a Chinese-founded AI lab — even one that relocated — set a precedent they were unwilling to accept.
The Nikkei Asia reporting noted that any path forward required Manus to fully exit Chinese ownership and operations. The NDRC's order suggests Beijing did not view the Singapore relocation as a clean enough break.
For Meta, the immediate problem is operational. The company has integrated a roughly 100-person team, restructured reporting lines up to its COO, and now faces an order from a foreign regulator to undo all of it. The exit bans on Hong and Ji add a personal dimension that no amount of corporate restructuring can solve from Menlo Park.
It is not yet clear what enforcement leverage the NDRC actually has over a Singapore-headquartered company owned by a US parent. Meta's statement that it expects "an appropriate resolution" suggests the company believes there is room to negotiate, possibly by further distancing the acquired entity from any remaining China nexus. The exit bans, however, sit outside that negotiation.
The episode is a warning shot for every US AI buyer eyeing teams with Chinese origins. Relocating a startup's HQ before a sale, once viewed as sufficient sanitization, may no longer clear the bar in either Washington or Beijing. Expect more deals to be structured as asset purchases or acqui-hires from day one, and expect cross-border AI M&A to slow while both governments figure out where the new lines are.
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