China blocks $2bn Meta takeover of AI agent developer Manus

China has blocked Meta’s $2bn (£1.5bn) acquisition of an AI startup as it cracks down on US investments in domestic tech companies.

Mark Zuckerberg’s Meta, the owner of Facebook, Instagram and WhatsApp, announced the acquisition of Manus, a developer of autonomous AI agents, in December.

However, the Chinese National Development and Reform Commission (NDRC) said on Monday it had cancelled the takeover.

In a statement, China’s top economic planning body said that it will “prohibit the foreign investment in the acquisition of the Manus project” and “requires the parties involved to withdraw the acquisition transaction”.

Bloomberg reported last week that Chinese regulators are planning to block tech firms, including leading AI startups, from accepting US investment without government approval.

Several private firms have reportedly been warned in recent weeks that they should reject US funding unless it receives explicit approval from Beijing, in a policy move triggered by the Manus deal.

Manus, which launched in Beijing but is now based in Singapore, described the deal as “validation of our pioneering work with general AI agents”.

AI agents are designed to carry out multiple tasks – such as planning holidays, handling customer queries or drafting research presentations – without human intervention and are important products for tech executives touting the labour-saving possibilities of the technology.

Meta, which is pouring billions of dollars into its AI drive, said when it announced the deal it would bring a “leading agent to billions of people and unlock opportunities for businesses across our products”.

Asked to comment on the NDRC move, Meta, the parent company of Facebook and Instagram, said: “The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.”

China and the US are the leading AI superpowers, with all of the top 20 best-performing models produced by a developer from one of those countries.

The US president, Donald Trump, claimed in January that “we’re leading China by a tremendous amount” in what the White House has billed as a straight race between Beijing and Washington for AI dominance.

The sudden move comes weeks before a planned mid-May summit between the US president, Donald Trump, and his Chinese counterpart, Xi Jinping, in Beijing.

China rarely orders corporate deals to be unwound after completion, in a sign of heightened regulatory scrutiny amid US-China tech competition.

China’s request to unwind the Manus deal is the latest high-profile case of it blocking a cross-border transaction.

Last year, China criticised billionaire businessman Li Ka-shing’s CK Hutchison for agreeing a $23bn sale of dozens of ports worldwide to a consortium led by US asset manager BlackRock. The deal was welcomed by Trump.

Manus was hailed early last year by state media and commentators as China’s next DeepSeek – one of the country’s leading AI startups – after releasing what it said was the world’s first general AI agent. Manus does not produce its own AI model, but an agent framework that operates on top of existing western large-language models.