China’s National Development and Reform Commission said it is blocking a foreign acquisition of the artificial intelligence startup Manus, reversing a deal that Meta announced late last year and that was intended to expand Meta’s AI agent offerings. The decision, announced in a one-line statement, was made through China’s security review mechanism for foreign investment, the commission said, and it required the parties to withdraw from the transaction.
In its statement, China’s top planning agency did not specifically name Meta Platforms, even though Meta is the U.S. company that announced the acquisition. The commission said the Office of the Working Mechanism for Security Review of Foreign Investment made the decision in accordance with Chinese laws and regulations, and it said it was prohibiting the foreign acquisition of Manus.
Manus, which has Chinese roots but is based in Singapore, provides a general-purpose AI agent designed to carry out sophisticated tasks such as coding an app, doing market research, and preparing quarterly budgets. Meta announced in December that it would buy Manus, calling the deal a rare example of a major U.S. technology firm acquiring an AI company with strong links to China.
Meta had said that it would not keep Chinese ownership interests in Manus and that Manus would discontinue its services and operations in China. After that announcement, China said in January that it would investigate whether the acquisition complied with Chinese laws, and China’s commerce ministry said that enterprises engaging in outward investment, technology exports, data transfers, and cross-border acquisitions must comply with Chinese law.
Manus’ status with respect to China appeared to be part of the scrutiny. The AP report said that, before the deal, Manus’ parent was Singapore-based Butterfly Effect Pte, but it traced Manus’ roots to Beijing-registered entities with similar names that were established years earlier. The commission did not provide additional reasons for the ban, and the statement arrived less than a month before U.S. President Donald Trump’s planned visit to Beijing to meet Chinese leader Xi Jinping in May.
In Washington, a White House spokesperson, Kush Desai, said in a statement that the Trump administration “will continue defending America’s leading and innovative technology sector against undue foreign interference of any sort.” Meta said on Monday that the Manus transaction “complied fully with applicable law,” adding that it expected “an appropriate resolution to the inquiry.”
The ban also underscored how AI agent deals are becoming intertwined with geopolitical competition. The AP report said analysts viewed China’s decision as part of a broader tightening of scrutiny around the AI industry as the United States and China compete over AI capabilities that can go beyond chatbots to take computer-based actions on people’s behalf.
Lian Jye Su, chief analyst at Omdia, said the ruling showed China’s leaders were willing to “play hardball” regarding AI talents and capabilities that China views as a core national security asset. Su also said the decision could deter similar acquisition plans by U.S. tech giants, arguing that it mirrors U.S. export controls, entity lists, and investment curbs directed at China.