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China's top economic planning agency ordered Meta to unwind its $2 billion acquisition of AI startup Manus on Monday, prohibiting foreign investment in the company and requiring both parties to withdraw from the transaction.

A terse statement from the National Development and Reform Commission offered no explanation beyond a citation of unspecified laws and regulations as the basis for its action. It did not name Meta directly. Reversals of completed transactions are an uncommon tool for Chinese regulators, making the directive an unusually aggressive intervention.

Manus started in China and later moved to Singapore, where its parent company, Butterfly Effect, was re-incorporated. Manus’s main product is an AI agent platform that can handle complex tasks on its own, such as writing code, doing market research, and processing data. By December 2025, about eight months after launching, Manus said it had passed $100 million in annualized revenue, which it claimed was a record pace for startups. Meta announced the deal in December, saying it would help advance its AI goals and add more advanced automation to its products.

In January, Beijing’s Ministry of Commerce said it would review the deal to see if it broke rules on foreign investment, technology transfers, or export controls. In March, Meta responded, saying the deal met all legal requirements and that it expected a positive outcome from the review. On Monday, Meta’s stock was down 0.2% in premarket trading.

The NDRC's move arrives weeks before a planned summit between President Donald Trump and Chinese President Xi Jinping in Beijing. The company's two founders — CEO Xiao Hong and chief scientist Ji Yichao — were called to Beijing for regulatory meetings in March and have since been prohibited from departing the country, Reuters reported, citing people familiar with the situation. Work at Meta's Singapore location has continued regardless, with former Manus employees embedded there even as their founders remain confined to China, according to Reuters.

The decision carries implications beyond the deal itself. When China's Commerce Ministry opened its investigation in January, the central question was whether Manus' Singapore incorporation was enough to place the transaction beyond Beijing's reach — a practice sometimes called "Singapore washing." The NDRC's ruling makes clear that corporate geography does not insulate a deal from Chinese regulatory authority when the underlying technology and talent originated in China.

The broader pattern reflects how AI acquisitions are increasingly treated as capability transfers subject to government review rather than ordinary M&A. In the weeks surrounding the Manus decision, Chinese agencies directed prominent AI companies such as Moonshot AI and Stepfun to turn away American investment unless they receive advance clearance, Bloomberg reported, adding that ByteDance faces comparable constraints.

The mechanics of any divestiture remain unresolved. Money has already changed hands, Manus personnel have been absorbed into Meta's workforce, and backers including Tencent, ZhenFund, and Hongshan have cashed out their stakes, Bloomberg said, citing people with knowledge of the matter.