China has ordered Meta to unwind its $2 billion acquisition of AI startup Manus, increasing scrutiny of foreign investments in Chinese-linked frontier technology. The National Development and Reform Commission cited foreign investment security concerns, requiring the parties to withdraw the transaction. This action targets Meta's completed purchase of the AI agent startup.
Manus had shifted operations outside China, closing its Chinese offices in July 2025 and moving to Singapore. Meta sought to bolster its AI agent capabilities, focusing on tools for complex tasks like app development and financial planning.
Beijing's intervention indicates regulators are examining the origin of technology, R&D locations, and team nationalities, not just company incorporation. This move also appears to address the practice of "Singapore washing," where startups relocate to access foreign capital and reduce regulatory oversight.
Meta stated the transaction complied with applicable law and expected a resolution. The situation emerges ahead of a planned summit between President Trump and President Xi Jinping, highlighting broader US-China tensions over artificial intelligence and strategic technology.