Quick overview

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China has decided to prohibit Meta Platforms Inc. from its $2 billion purchase of the agentic AI startup Manus, an unexpected move to end a contentious agreement that has drawn criticism over technology leaks to the US. In a brief statement on Monday, the National Development and Reform Commission issued an order to cancel the agreement.

Without providing further details, the influential state planner stated in a one-line notice that it has decided to forbid foreign investment in the startup in compliance with laws and regulations.

The decision, which surfaced weeks before a high-profile summit between US President Donald Trump and China’s Xi Jinping, is expected to send a chill through China’s rapidly developing AI industry. Following the mostly finalized deal, Beijing has increased its scrutiny of important industry companies.

Although domestic critics have since bemoaned the loss of valuable technology to a geopolitical rival, the sale was initially praised as a model for startups with global aspirations.

The founders of Manus began in China, but in 2025, they moved their main office and important employees to Singapore. When the agreement was made public in December, it was unclear whether Beijing would use its power over a transaction that, in theory, happened outside of its borders.

According to Ke Yan, a tech analyst with DZT Research in Singapore, “the Manus block is a clarifying moment.”. “Manus was pulled back even though its founders were based in Singapore and it was incorporated here. Beijing’s message is that the location of the legal entity is not important. “As Meta looks to compete in AI against rivals from Microsoft Corp., the Manus decree may be a setback.” and Alphabet Inc., Google to Anthropic PBC and OpenAI. Manus was meant to assist Meta in taking the lead in the rapidly evolving field of AI agents, or services that employ AI to carry out tasks.