Beijing blocks Meta’s $2B purchase of AI startup Manus

China’s state planner on Monday called on Meta to reverse its ongoing $2.5 billion purchase of Manus, citing national security concerns.

The country’s National Development and Reform Commission said cross-border tech deals must comply with strict rules, even as Meta insisted the transaction followed the law.

The decision comes just weeks before a key summit between President Donald Trump and Xi Jinping in Beijing. Technology control and trade disputes are expected to dominate the talks, and this move signals Beijing’s tougher stance on cross-border tech deals. It also reflects a broader split in global innovation, especially in AI and semiconductors.

Manus developed powerful AI agents capable of writing detailed reports and creating presentations. The startup began in China under the name Beijing Butterfly Effect Technology in 2022, later shifting parts of its business to Singapore following foreign investment.

However, regulators argue it remains tied to China, giving them authority to review and block the deal.

Chinese officials also questioned the founders of Manus and restricted their travel during the probe. They worry such deals could encourage other startups to move abroad without approval.

For Meta, the situation is complex. It has already integrated Manus tools into its products, making any reversal difficult, especially after investors have exited.

Losing Manus would hurt the tech giant, which was banking on the deal to improve its AI edge.