Meta bought Manus in December 2025. The deal was done — more than $2 billion for a startup that built what it called the world’s first general AI agent. Four months later, Beijing has ordered the whole thing unwound.

China’s National Development and Reform Commission (NDRC) announced on Monday that it was blocking the acquisition on national security grounds. Not blocking a proposed deal — ordering the reversal of one that had already closed. That distinction matters.

This is not a regulatory speed bump. It is a shot across the bow of every cross-border AI transaction involving Chinese-born technology.

What Manus Was — and Why Beijing Cared

Manus was founded in China and rose to prominence early last year, when state media and commentators hailed it as the country’s next DeepSeek after releasing an AI agent capable of executing complex tasks with minimal human intervention — a step beyond chatbot-style AI into what the industry calls “agentic” systems.

Months later, Manus moved its headquarters from China to Singapore, joining a wave of Chinese companies repositioning overseas to hedge against US-China tensions. The relocation did not work. In March, Manus CEO Xiao Hong and chief scientist Ji Yichao were barred from leaving China as regulators began reviewing the deal, according to sources familiar with the matter cited by Channel News Asia.

The NDRC’s ruling makes clear that a Singapore address does not sever Beijing’s claim over technology developed on Chinese soil.

Alfredo Montufar-Helu, a managing director at Ankura China Advisors, framed it plainly: “China is saying we will prevent foreign acquisition of assets we consider important for national security — and AI is now clearly one of them.” The move also signals to firms that relocating overseas will not shield them from scrutiny, he added.

Meta’s Response

Meta, for its part, is projecting calm. The California-based company told AFP that “the transaction complied fully with applicable law” and that it anticipates “an appropriate resolution to the inquiry.”

That is corporate diplomacy for: we are not backing down yet. But Meta has limited leverage here. China is not asking for concessions — it is ordering a cancellation. There is no appeals process that a US tech giant can meaningfully pursue inside China’s regulatory apparatus.

The Bigger Picture

The NDRC’s decision fits a pattern. For years, US-China technology competition centered on semiconductors — Washington restricted chip exports, Beijing poured subsidies into domestic alternatives. The frontier has shifted. AI models, AI agents, and the talent that builds them are now treated as strategic assets on par with advanced chipmaking.

Washington has tried to hamper China’s AI development with export controls designed to cut off access to US-made chips. Beijing’s move on Manus is the reciprocal: preventing AI talent and intellectual property from flowing the other direction.

The timing is notable. The decision could add another friction point to a planned mid-May Beijing summit between US President Donald Trump and Chinese President Xi Jinping — a meeting where AI competition was already likely to feature prominently.

What This Means for Cross-Border AI Deals

The Manus case establishes an uncomfortable precedent. If China is willing to unwind a completed acquisition — not merely review or delay one — then no deal involving Chinese-developed AI can be considered final until Beijing signs off.

For startups, the calculus is brutal. A Singapore incorporation might protect against some US regulatory headaches. It offers no defense against a determined NDRC. For acquirers, the lesson is equally stark: Chinese national security review is not a box to check after closing. It is a potential deal-killer that operates on its own timeline.

If AI is the new oil, then Beijing has just demonstrated that it considers the wells non-transferable — regardless of what the deed says or where the corporate mailbox happens to be.

Sources