China blocks Meta's $2 billion deal to buy AI startup Manus

China has blocked Meta's $2 billion acquisition of Manus, a Singapore-based artificial intelligence startup founded by former Chinese researchers, according to government and media reports released Monday. The decision, confirmed by Chinese regulators, marks one of the most significant interventions in a foreign tech acquisition in recent months and underscores Beijing's growing wariness of US access to emerging AI technologies.

Manus, while legally headquartered in Singapore, was developed by a team with deep roots in China's AI research community and maintains technical operations linked to the country. That connection triggered a mandatory review under China's outbound investment and technology control rules, which require government approval for domestic firms or individuals accepting foreign capital in strategic sectors like AI.

Regulators did not issue a detailed public explanation but cited national security and data governance concerns in internal communications, according to sources familiar with the review. The decision aligns with a broader pattern of Beijing tightening oversight on AI-related transactions, especially those involving American tech giants. In recent years, China has updated export control lists to include certain AI algorithms and data-processing methods, giving it more leverage over deals like this one.

For Meta, the blocked acquisition is a setback in its push to expand its AI agent technology-software that can perform complex tasks autonomously. Manus had gained attention in tech circles for its prototype AI assistants capable of navigating digital environments much like humans, a capability Meta hoped to integrate into its platforms. The company had positioned the deal as a way to accelerate its AI roadmap outside the US and Europe.

The outcome also highlights the increasing complexity of global AI competition. As both the US and China seek to dominate the next generation of AI, cross-border deals are becoming more politicized. While the US has tightened CFIUS reviews on Chinese investments, China is now asserting its own gatekeeping role-especially when the technology in question has originated within its borders, even if the company is now based elsewhere.

Analysts say the Manus decision could have ripple effects. Other startups with Chinese founders or technical heritage may now face tougher scrutiny when seeking acquisition by Western firms. Some investors are already reevaluating how they structure AI ventures to avoid similar roadblocks.

Meta has not issued a detailed public response but acknowledged the regulatory outcome in a brief statement, saying it respects local laws and will continue exploring ways to advance AI innovation globally. Meanwhile, Manus has said it will remain independent and continue developing its technology, though its long-term funding path is now less certain.