China vetoes Meta’s $2B Manus deal after months-long probe

China’s apical economical planner, the National Development and Reform Commission (NDRC), said connected Monday it has blocked Meta’s $2 cardinal acquisition of Manus, an agentic AI startup founded by Chinese engineers that relocated to Singapore earlier Mark Zuckerberg scooped it up precocious past year.

The determination marks 1 of China’s astir important interventions successful a cross-border deal, 1 that extends good beyond U.S.-China tensions and into the broader AI industry. For Meta, it could woody a superior stroke to its ambitions successful the fast-moving AI agents space.

With nary mentation offered, China’s NDRC ordered some parties to unwind the woody entirely.

“The National Development and Reform Commission (NDRC) has made a determination to prohibit overseas concern successful the Manus task successful accordance with laws and regulations, and has required the parties progressive to retreat the acquisition transaction,” it said.

But the concern is acold from straightforward. Around  100 Manus employees person already moved into Meta’s Singapore offices arsenic of March, with founders taking connected enforcement roles. CEO Xiao Hong present reports directly to Meta COO Javier Olivan. Manus CEO Hong and Chief Scientist Yichao Ji are reportedly nether exit bans, preventing them from leaving mainland China.

“The transaction complied afloat with applicable law. We expect an due solution to the inquiry,” a spokesperson astatine Meta told TechCrunch.

Founded successful 2022 by Hong, Ji and Tao Zhang, Manus relocated its office from China to Singapore astir mid-2025. Just months later, Meta came knocking. The institution announced its acquisition of Manus successful December 2025 for astir $2 cardinal to $3 billion, with plans to fold its cause exertion straight into Meta AI.

Meta has agreed to get Singapore-based AI startup Manus, with the woody requiring a afloat exit from Chinese ownership and operations, per Nikkei Asia. But the company’s origins hint backmost to China. Manus’ founders antecedently established its genitor company, Butterfly Effect, successful Beijing successful 2022 earlier relocating to Singapore. That inheritance has drawn scrutiny successful Washington, wherever Senator John Cornyn has already raised concerns astir Benchmark’s concern successful the company, questioning whether American superior should beryllium flowing to a Chinese-linked firm, TechCrunch pointed out, citing Cornyn’s station connected X.

Manus did not respond to TechCrunch’s petition for comment.