China blocks Meta's $2 billion acquisition of AI startup Manus
Beijing orders the unwinding of the already completed acquisition. The move comes amid intensifying technological rivalry between the US and China.
China's top economic planning agency NDRC has blocked Meta's acquisition of AI startup Manus and ordered the parties involved to unwind the deal. The agency would prohibit "foreign investment" in Manus and has "required the relevant parties to cancel the acquisition transaction," according to its statement.
The $2 billion deal was announced in December and closed earlier this year. Meta had acquired Manus as part of its efforts to catch up with OpenAI and Google in the AI race. Meta has already integrated the technology into some of its own products, which significantly complicates an unwinding. According to the Financial Times, options include spinning off the acquisition to a new buyer or selling it back to its former investors.
Manus was founded in 2022 by the Chinese startup Butterfly Effect, which moved its headquarters and core team to Singapore following a funding round led by top US venture capital firm Benchmark Capital.
Beijing Sends Warning Signal Ahead of Trump-Xi Summit
Multiple Chinese regulators had reviewed the deal since January, including the NDRC, the commerce ministry, and China's antitrust watchdog. In March, authorities restricted two co-founders of Manus from leaving the country. Beijing had previously branded the acquisition a "conspiratorial" attempt to hollow out the country's technology base.
A person briefed on the thinking behind the NDRC statement told the Financial Times the gesture was "pretty harsh and it carries a strong intention to stop follow-on deals [like Manus]. In reality, it's hard to unwind a done deal, so it is more about verbal warnings on similar deals and the leveraging building before the Xi-Trump summit."
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