China Forces Meta to Unwind $2 Billion Manus AI Deal

The National Development and Reform Commission (NDRC) of China ordered Meta Platforms to unwind its approximately $2 billion acquisition of AI startup Manus on April 27, 2026. The directive followed a regulatory probe launched in January 2026 into whether the deal violated Chinese laws regarding the export of restricted technologies and data outbound transfers. Although Manus had relocated its headquarters to Singapore and ceased mainland operations in 2025 to facilitate the sale, Beijing determined the technology remained strategically Chinese.

During the investigation, Chinese authorities barred Manus co-founders Hong Xiao and Ji Yichao from leaving China. The NDRC characterized the startup's relocation as a non-compliant practice of Singapore-washing used to bypass oversight. Meta initially maintained that the transaction complied fully with applicable law, but by June 2026, the company began operationally separating from the startup by implementing data firewalls and sunsetting the platform.

This regulatory action coincided with intensifying AI rivalry, including U.S. accusations of industrial-scale intellectual property theft and a scheduled May summit between Donald Trump and Xi Jinping in Beijing. The incident has set a precedent for other entrepreneurs; for example, billionaire Chen Tianqiao implemented strict internal firewalls at his startup, MiroMind, to separate Chinese and international operations. To resolve the deadlock, Manus founders are currently seeking $1 billion from external investors to fund a company buyback and potentially restructure as a Chinese joint venture.