China Forces Meta to Unwind $2 Billion Manus Deal Amid National Security Probe
Beijing has ordered Meta to divest its controlling stake in Manus, the AI startup founded by Chinese entrepreneurs, marking the most significant enforcement action yet in China's escalating campaign to restrict foreign access to domestic artificial intelligence capabilities.
The Chinese Ministry of Commerce formally demanded Meta unwind the $2 billion acquisition on April 27, concluding an investigation opened in January 2026 that barred both Manus cofounders from leaving China during the review period. Authorities cited national security grounds for the ban on foreign investment in the company—a designation that effectively criminalizes Meta's ownership structure. Manus had gained prominence in March 2025 following its launch of a "general AI agent" designed to handle complex multi-step tasks across digital platforms.
The intervention underscores how the US-China technology rivalry has moved beyond export controls and chip restrictions into the domain of cross-border investment and corporate ownership. American technology companies seeking to acquire or partner with Chinese AI firms now face simultaneous regulatory pressure from Washington and Beijing, creating an environment where dealmaking has become functionally untenable. Meta's acquisition—completed in December 2025—spent only four months under official scrutiny before Beijing's decision forced a reversal.
The Manus case signals broader implications for technology sector consolidation across the Pacific. China has signaled willingness to use its foreign investment review mechanisms aggressively when national AI capabilities are at stake, while the United States has simultaneously tightened outbound investment restrictions targeting Chinese technology companies. For firms navigating both regimes, the operational space for cross-border AI partnerships is rapidly contracting, raising questions about the future viability of any acquisition structure involving American ownership of Chinese AI assets.