China Orders Meta to Unwind Its $2 Billion Manus AI Deal

Beijing has ordered Meta to unwind its $2 billion acquisition of Manus, a Singapore-incorporated AI startup staffed largely by Chinese engineers, escalating a tech conflict that has been building since DeepSeek rattled Silicon Valley at the start of last year.

China's National Development and Reform Commission issued the order on April 27, directing Meta to reverse the deal it announced in December 2025. The agency's concern is clear enough: Manus's capabilities are, in Beijing's view, a strategic asset, and the acquisition would transfer them to an American company. Meta responded with a brief statement saying the deal "complied fully with applicable law" and that it was reviewing the order.

Manus launched in early 2025 as a general-purpose AI agent, drawing significant attention for its ability to carry out complex, multi-step tasks without human guidance. At a $2 to $3 billion valuation, the company commanded a premium that reflected the moment: agentic AI is where serious investment is flowing right now, from OpenAI's enterprise agent push to the Meta-AWS compute deal announced just days before this one collapsed.

The NDRC intervention isn't entirely surprising. China has been tightening its grip on AI exits for some time, whether by leaning on domestic labs to preserve Chinese corporate structures or using export controls on rare earth materials to constrain foreign chip production. Blocking a foreign buyout of a Chinese-founded company is a sharper move, though, and a more public one.

What makes this worth watching is what it says about how Beijing now classifies AI agents. Manus isn't a chips firm or a data center. It's a software product that reasons, plans, and acts. If China treats agentic AI as national infrastructure worth protecting through regulatory intervention, other startups with Chinese origins or engineering teams may face the same scrutiny on any future exit.

Whether Meta pursues the acquisition through restructured terms or walks away entirely has not been announced. The $10 billion walk-away option Meta holds in a separate deal, the SpaceX-Cursor arrangement, offers an interesting parallel: large tech players are increasingly willing to pay for optionality in AI acquisitions precisely because the regulatory environment on both sides of the Pacific is so unpredictable.

Sources: CNBC, The Washington Post, Bloomberg