China on Monday blocked U.S. tech giant Meta's acquisition of the artificial intelligence startup Manus, a move that shows how state power can reach into corporate dealmaking and shut down a cross-border transfer of advanced technology when it suits the rulers in Beijing. The National Development and Reform Commission, China's top planning agency, said in a one-line statement that it was prohibiting the foreign acquisition of Manus and had required all the parties to withdraw from the deal.
Who Holds the Gate
The commission did not specifically name Meta Platforms, which owns Facebook and Instagram, but the target was obvious enough. The decision was made by the commission's Office of the Working Mechanism for Security Review of Foreign Investment in accordance with Chinese laws and regulations, the statement said. That is the apparatus speaking in the language of compliance, security review, and legal procedure while deciding which corporate marriages are allowed and which are not.
China had already signaled that it was looking into the deal earlier this year. In January, Chinese authorities said they would investigate whether the acquisition would be consistent with its laws and regulations. China’s commerce ministry said at the time that any enterprises engaging in outward investment, technology exports, data transfers and cross-border acquisitions must comply with Chinese law. The base report does not say what evidence was presented, only that the commission did not elaborate on the reasons for the ban.
Who Gets Caught in the Middle
Meta announced in December that it was acquiring Manus, in what the report describes as a rare case of a major U.S. tech group buying an AI company with strong links to China. Meta said the deal was expected to help expand AI offerings across Meta's platforms. The company also said there would be “no continuing Chinese ownership interests in Manus” and that Manus would discontinue its services and operations in China. That is the familiar corporate script: expansion, consolidation, and the quiet erasure of local ties in the name of scale.
Manus did not respond to a request for comment. Its website says the company “is now part of Meta,” indicating that the deal had already been completed. Meta said on Monday that the Manus transaction “complied fully with applicable law.” “We anticipate an appropriate resolution to the inquiry,” the California-based company said in a statement. The language is polished, but the conflict is plain: one set of institutions says the deal is lawful, another set says the deal is forbidden, and the people whose labor and technology are being shuffled around are not the ones setting the terms.
Meta had said most of Manus' employees were based in Singapore. Before the deal, Manus' parent was Singapore-based Butterfly Effect Pte, but the AI startup traces its roots back to Beijing-registered entities with similar names that were established several years earlier. Those details show how corporate structures stretch across borders while governments still claim the right to police the movement of capital and technology.
What the Rivalry Looks Like
Analysts said the decision is a sign that China’s communist leaders are tightening scrutiny of the AI industry amid intensifying geopolitical rivalry with the U.S. over the technology. Lian Jye Su, chief analyst at the technology research and advisory group Omdia, said, “China is showing the world that it is willing to play hardball when it comes to AI talents and capabilities, which the country views as a core national security asset.” He added, “It is strongly indicative of what Chinese authorities may do going forward regarding acquisitions involving Chinese deep-tech companies.”
Su also said Beijing’s acquisition ban could deter similar acquisition plans by U.S. tech giants going forward. “In the context of rivalry, it mirrors U.S. export controls, entity lists, and investment curbs on China,” he said. The symmetry is neat enough for diplomats and analysts, but for everyone else it is another reminder that ordinary people are left to live inside a contest between rival power blocs that treat technology as a strategic asset.
The announcement came less than a month before U.S. President Donald Trump's planned visit to Beijing to meet Chinese leader Xi Jinping in May. The timing hangs over the decision, though the commission did not connect the ban to the visit.
Meta's interest in Manus reflects a broader tech industry race to lead in the development of AI agents that can go beyond a chatbot’s capabilities to take computer-based actions on people’s behalf. Meta last month acquired Moltbook after it attracted viral attention as a social network built for AI agents to make posts and interact with each other. That was after OpenAI, maker of ChatGPT, hired the creator of AI agent OpenClaw, formerly called Moltbot and the technology upon which Moltbook was built.
Chan reported from London. AP Technology Writer Matt O'Brien in Providence, Rhode Island contributed to this report.