China’s decision to block the $2 billion Meta-Manus deal shows how far Washington and Beijing are drifting apart over AI

China has blocked Meta’s deal to acquire AI startup Manus. The National Development and Reform Commission, the country’s top macroeconomic regulator, unceremoniously posted on Monday that it had “decided to block the foreign acquisition of the Manus project and require the parties to unwind the deal.”

The move is a headache for Meta, for whom the Manus acquisition, reportedly valued at around $2 billion, was a key element of its new AI strategy. It’s also not clear how Meta can “unwind” the deal: Manus employees had already joined Meta’s AI team, and backers like Tencent and Hongshan Capital had already received their cut of the deal, according to a report from Bloomberg.

The blocked deal also shows how quickly the U.S. and Chinese AI ecosystems are decoupling, as both Washington and Beijing now seek to maintain control of strategic technologies and prevent them from leaking to the other. 

“The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry,” a Meta spokesperson said in a statement.

Investors shrugged off the news, with Meta shares up 0.5% in Monday trading. 

Is Manus a Chinese company? A Singaporean company? Or both?

Manus first grabbed the global spotlight in early 2025 when, in the wake of DeepSeek’s shock to global markets, its parent company—then called “Butterfly Effect”—unveiled an AI agent that its founders promised was “truly autonomous.” 

Then, in July 2025, the company announced that it had moved its office from Beijing in China, where it was founded, to Singapore, a popular destination among Chinese companies trying to distance themselves from their........

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