China orders Meta to reverse $2 billion Manus acquisition over AI technology risks

China has ordered Meta Platforms to unwind its $2 billion acquisition of Manus, an artificial intelligence startup, after months of regulatory scrutiny. The move marks an unprecedented escalation in Beijing's efforts to exert control over business deals completed outside its borders, signaling a new frontier in tech geopolitics between China and the United States.

The blockade is particularly striking because the acquisition was already finalized months earlier. Manus, originally a Chinese-founded company that had relocated its headquarters to Singapore and restructured its ownership to distance itself from Beijing's oversight, was acquired by Meta in late December 2025. At the time, the company had amassed millions of users and was generating over $100 million in annual recurring revenue, making it one of China's most prominent AI startups. Meta had announced the deal as part of Chief Executive Mark Zuckerberg's broader push to develop advanced autonomous AI agents for consumer and enterprise applications, including Meta AI assistant.

Chinese regulators have cited concerns about technology leakage to the United States as their primary justification for blocking the deal. The acquisition of Manus, which specializes in general-purpose AI agents capable of acting autonomously rather than waiting for human prompts, appears to have triggered particular alarm in Beijing. The startup's models had topped global benchmarks, making it a valuable asset in the intensifying competition between China and the U.S. over artificial intelligence development. By acquiring Manus, Meta would gain access to advanced agentic AI technology and talent, a prospect that Chinese authorities have determined poses a strategic risk.

What distinguishes this action from previous Chinese regulatory interventions is its extraterritorial nature. China has historically sought to influence business deals within its jurisdiction, but pressing a foreign company to reverse a completed acquisition involving companies operating outside Chinese territory represents a significant escalation. The decision tests whether Beijing can effectively project its regulatory authority and strategic interests across borders, setting a potential precedent for how state actors might intervene in major tech transactions globally.

The blockade also reflects broader tensions in U.S.-China relations over artificial intelligence development. Both nations view AI capabilities as critical to future technological and military dominance, and acquisitions like Manus have become flashpoints for geopolitical competition. Meta's response to China's demand and whether it will comply remain uncertain, as does the potential impact on future cross-border tech acquisitions and international business dynamics in the AI sector.