China Forces Meta to Unwind $2 Billion Manus AI Acquisition

China’s National Development and Reform Commission has ruled Meta’s $2 billion acquisition of AI platform Manus invalid, ordering both companies to reverse the transaction. The decision puts Meta in a difficult position, having already woven Manus’ agentic AI tools into its advertising systems since completing the deal in January 2026.

Why China Has Jurisdiction

Although Manus is headquartered in Singapore, the company was originally founded in China. That origin brings it under Beijing’s stringent cybersecurity and foreign investment review laws. Regulators determined that the acquisition failed to meet the required standards, though the full reasoning behind the ruling has not been made public. Complicating matters further, Manus’ two co-founders were summoned to Beijing in March for regulatory talks and subsequently banned from leaving the country.

Meta maintained that the deal satisfied all legal requirements and expressed hope for a favorable resolution before the final verdict was issued. The company has yet to confirm its next steps following the ruling.

A Broader Battle Over AI Dominance

The decision reflects a wider pattern of tightening Chinese oversight over foreign investment in artificial intelligence. With both the United States and China racing to establish dominance in AI development, Beijing’s regulators are taking an increasingly assertive role in controlling how AI assets move across borders.

While Meta could theoretically separate Manus’ tools from its existing infrastructure and lean more heavily on its own in-house AI capabilities, the case underscores the deepening technological divide between the two superpowers. For global tech companies, navigating cross-border AI investments is only set to grow more complex.