China Forces Meta to Unwind $2 Billion Manus AI Deal
China's National Development and Reform Commission ordered Meta Platforms to reverse its acquisition of AI startup Manus over national security and technology transfer concerns.
The National Development and Reform Commission (NDRC) of China ordered Meta Platforms to unwind its $2 billion acquisition of the AI startup Manus on April 27, 2026. The directive followed a regulatory probe launched in January 2026 into the transfer of advanced agentic AI technology and data. Although Manus had relocated its headquarters to Singapore in 2025 to access global capital, Beijing determined the technology's origins remained linked to China, characterizing the move as a non-compliant practice of "Singapore-washing."
During the investigation, Chinese authorities barred Manus co-founders Hong Xiao and Ji Yichao from leaving the country. Meta initially maintained that the transaction complied fully with applicable law, but by June 2026, the company began operationally separating from the startup. Meta implemented data firewalls, barred Manus staff from internal systems, and began sunsetting the platform to migrate projects to its own systems.
To facilitate the buyback and potential restructuring as a Chinese joint venture, Manus founders Hong Xiao, Ji Yichao, and Zhang Tao began seeking $1 billion from external investors. The incident has had broader industry implications, prompting other entrepreneurs like Chen Tianqiao to implement strict internal firewalls to separate Chinese and international operations. In response to the case, Beijing announced new outbound investment rules effective July 1, 2026, expanding the government's authority to block cross-border deals involving Chinese-origin technology regardless of where a company is incorporated.
