China's National Development and Reform Commission (NDRC) has prohibited the acquisition of the artificial intelligence startup Manus by Meta Platforms, the parent company of Facebook and Instagram. The move, announced on Monday, marks an unexpected reversal of a deal that had already been completed, according to Manus's website, which states the company "is now part of Meta."
The NDRC's Office of the Working Mechanism for Security Review of Foreign Investment issued the ban without explicitly naming Meta, but stated that all parties must withdraw from the transaction. The decision follows an investigation launched in January into whether the acquisition complied with Chinese laws and regulations.
Geopolitical Context and Timing
The prohibition comes less than a month before US President Donald Trump's planned visit to Beijing for talks with Chinese leader Xi Jinping in May. Analysts interpret the timing as a signal that Beijing is intensifying oversight of the AI sector amid escalating technological rivalry with Washington. The move underscores China's determination to retain control over what it considers strategic assets.
Meta announced the acquisition of Manus in December. The startup, which has Chinese roots but is headquartered in Singapore, gained attention for unveiling what it called the "world's first fully autonomous AI" agent capable of performing complex multi-step tasks such as buying property, programming video games, analyzing stocks, and planning travel itineraries. Some observers dubbed it "China's next DeepSeek," referencing the Chinese AI firm that has gained prominence with cost-effective models.
Meta had stated that there would be "no continuing Chinese ownership interests in Manus" and that the startup would discontinue its services and operations in China. However, Chinese regulators were not satisfied. In February, the Financial Times reported that Manus's CEO Xiao Hong and chief scientist Ji Yichao were barred from leaving the country while the review was underway.
China's commerce ministry has emphasized that any enterprises engaging in outward investment, technology exports, data transfers, or cross-border acquisitions must comply with Chinese law. Meta has countered that most of Manus's employees are based in Singapore, but Beijing's reach extends to companies with Chinese founders or operations.
Meta said on Monday that the Manus transaction "complied fully with applicable law" and that it anticipates "an appropriate resolution to the inquiry." The company did not comment on the NDRC's ban.
Lian Jye Su, chief analyst at the technology research and advisory group Omdia, said: "China is showing the world that it is willing to play hardball when it comes to AI talents and capabilities, which the country views as a core national security asset. It is strongly indicative of what Chinese authorities may do going forward regarding acquisitions involving Chinese deep-tech companies."
The decision highlights the growing tension between the US and China over AI technology, a dynamic that also affects European companies and policymakers. The EU has been navigating its own path, seeking to balance technological cooperation with security concerns. For instance, the EU and US recently signed a critical minerals pact to counter China's supply dominance, reflecting broader efforts to reduce dependency on Beijing.
Meanwhile, Chinese AI firms continue to push boundaries. DeepSeek V4, for example, has emerged as a cost-effective challenger in the global AI race, further intensifying competition. The Manus case suggests that Beijing is willing to use regulatory tools to prevent the outflow of cutting-edge technology, even if it means blocking deals that have already been finalized.
For European observers, the episode serves as a reminder of the complex interplay between technology, national security, and geopolitics. As the EU develops its own AI regulations and seeks to foster innovation, the Manus case may inform how European authorities approach foreign acquisitions of domestic tech startups.
