China blocks Meta’s acquisition of AI startup Manus

China blocked Meta’s acquisition of AI startup Manus, citing foreign investment security review rules. The deal, involving a Singapore-based firm with Chinese roots, was halted after scrutiny by regulators, despite Meta claiming full legal compliance and expecting resolution

Hong Kong: China on Monday blocked Meta’s acquisition of the artificial intelligence startup Manus, which has Chinese roots but is Singapore-based. In a short statement, China’s National Development and Reform Commission, the country’s top planning agency, said it was prohibiting a foreign acquisition of Manus and had required all the parties to withdraw from the deal. It did not specifically name Meta, which owns Facebook and Instagram.

The decision was made by the commission’s Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. It came after Chinese authorities said they were looking into the deal earlier this year. The commission did not elaborate on the reasons for the ban.

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Meta first announced that it was acquiring Manus in December in a rare case of a major US tech group buying an AI company with strong links to China. Its deal with Manus, whose “general-purpose” AI agent can perform multi-step complex work autonomously, was expected to help expand AI offerings across Meta’s platforms.

Meta had said there would be “no continuing Chinese ownership interests in Manus” and that Manus would discontinue its services and operations in China. But China said in January that it would investigate whether the acquisition would be consistent with its laws and regulations. China’s commerce ministry said at the time that any enterprises engaging in outward investment, technology exports, data transfers and cross-border acquisitions must comply with Chinese law.

Meta had said most of Manus’ employees were based in Singapore. Meta said on Monday in a response that the transaction “complied fully with applicable law.” “We anticipate an appropriate resolution to the inquiry,” the California-based company said in a statement.