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CHINA ordered US tech giant Meta to unwind its $2 billion-plus acquisition of artificial intelligence startup Manus on Monday, as Beijing tightens scrutiny of US investment in domestic startups developing frontier technologies.
The National Development and Reform Commission’s move highlights China’s commitment to stopping US firms acquiring Chinese AI talent and intellectual property, as Washington tries to limit Chinese tech firms’ access to advanced US chips.
The NDRC’s office for reviewing the security of foreign investments said it would “prohibit foreign investment in Manus in accordance with laws and regulations, and requires the parties involved to withdraw the acquisition transaction”.
It did not name Meta or other overseas investors in Manus.
After a $75 million fundraising round led by US venture firm Benchmark in May 2025, Manus shut its China offices in July, laying off dozens of employees. It then moved its operations to Singapore.
This enabled Manus’ parent company, Butterfly Effect, to re-incorporate in Singapore and bypass US investment restrictions on Chinese AI firms, as well as Chinese rules limiting domestic AI firms’ ability to transfer their IP and capital overseas.
It was not immediately clear on what grounds China was seeking the annulment of a deal involving a Singapore-based company and how, if at all, a completed acquisition transaction would be unwound.
But analysts and lawyers said the rare move to unwind a completed deal underscores how Beijing was looking to establish its jurisdiction over cross-border transactions involving Chinese assets, shareholders or technology under its national security review regime.
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