China blocks Meta’s acquisition of Chinese-founded AI startup Manus
A security guard stands next to a sign at Meta headquarters on February 2
By John Liu, CNN
Hong Kong (CNN) — China has moved to block Meta’s $2 billion acquisition of Chinese-founded artificial intelligence startup Manus, a decision that reflects Beijing’s concerns that it could lose key technology to the United States amid an intensifying tech war.
The country’s state planner made a brief statement Monday demanding the two parties unwind the deal following a probe that Beijing launched into the acquisition earlier this year.
The move, which is expected to have a chilling effect on China’s AI startup scene, came just weeks ahead of US President Donald Trump’s much anticipated summit with Chinese leader Xi Jinping in Beijing. The two are expected to iron out disputes on several key issues, ranging from trade to technology controls.
Beijing’s decision reinforces the bifurcation of global technology development as US-China tension heats up, and underscores the increasingly challenging environment for cross-border investments in critical sectors such as AI and semiconductors.
Unwinding the deal, however, will be complicated in practice. Soon after announcing the acquisition in late December, Meta had integrated Manus into its internal systems and executives of the startup had joined the American tech giant.
For Meta, the blocked acquisition could represent a missed opportunity to strengthen its AI capabilities as the race for the technology with rivals like Google and OpenAI picks up.
In response to Beijing’s decision, a Meta spokesperson told CNN that the transaction “complied fully with applicable law.”
“We anticipate an appropriate resolution to the inquiry,” the person added, without elaborating on how the company expects to reach a solution with Beijing.
CNN has reached out to Manus for comment.
Manus was founded in China and made waves in the industry when it launched its AI agent – a system that can act autonomously on a user’s behalf – in March last year. For many in China, the rise of a homegrown agentic AI startup with top-tier performance was a source of pride.
But public sentiment soured after the startup relocated its headquarters and most of its operations to Singapore, and even more so after it announced that it had been sold to Meta.
On Chinese social media, some decried the sale as “treacherous” and accused the company of “selling out” to the US, which has imposed sweeping export controls on China with an aim to slow its progress in frontier technologies such as AI.
In an unusually swift move, Beijing launched a probe into the acquisition in January, seeking to discourage other Chinese tech startups from pursuing a similar strategy. It remains unclear whether authorities will announce further steps in the investigation.
Yet, analysts have previously warned that a heavy-handed response from Beijing, such as annulling the deal, could dampen entrepreneurs with global ambitions and encourage talent to start businesses abroad from the outset.
Last month, the Financial Times reported that Beijing had banned two co-founders of Manus, Xiao Hong and Ji Yichao, from leaving the country as it carried out an investigation.
The-CNN-Wire
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