Regulators in China have halted Meta’s planned takeover of artificial intelligence firm Manus, dealing a setback to the social media giant’s ambitions to expand its AI capabilities.
The agreement, first revealed in late December, was reportedly valued at about $2 billion at the time. Meta had intended to integrate Manus’ technology into its own systems, strengthening AI features across its platforms. However, reports published Monday indicated that China’s National Development and Reform Commission had rejected the deal. Authorities cited restrictions on foreign investment and instructed both sides to abandon the transaction.
In a statement to the BBC, a Meta spokesperson said the company had followed all relevant legal requirements. The spokesperson added that Meta expects the matter to be resolved appropriately after further review.
The decision follows several months of regulatory examination by Chinese officials. Although Manus now operates out of Singapore, it was originally established in China, placing it under the country’s jurisdiction. Beijing maintains tight oversight of its technology sector, particularly when it comes to transferring assets or intellectual property to overseas buyers.
Manus has attempted to distinguish itself in the crowded AI market by promoting what it describes as a fully autonomous digital agent. Unlike standard chatbots that depend on repeated prompts, the company claims its system can independently organize, carry out, and complete tasks based on initial instructions. This capability had made it an attractive target for Meta, which has been investing heavily in artificial intelligence.
Industry analysts described the proposed acquisition as a logical move. Mark Zuckerberg has made AI development a central priority, pushing the company to accelerate innovation even as it restructures its workforce. Earlier this year, Meta informed employees of plans to reduce staffing levels while increasing spending in AI-related areas.
The situation is complicated further by broader geopolitical strains. Relations between China and the U.S. have remained tense, especially in the technology sector. Both governments have raised concerns about security, intellectual property, and market access.
China’s regulatory framework has previously influenced major international deals. For example, Beijing’s approval was necessary during negotiations involving TikTok and its parent company ByteDance when discussions arose over the app’s future in the United States.
Reports in March suggested that Manus’ co-founders were temporarily restricted from leaving China while authorities reviewed the Meta transaction. At the time, Meta said the Manus team had already become closely integrated into its operations and continued to develop and expand the service for its global user base.
If regulators ultimately require the deal to be fully unwound, it could present operational and strategic challenges for Meta, particularly given the level of integration already achieved.
The dispute also comes as Washington signals increased cooperation with domestic AI firms. U.S. officials recently warned of large-scale efforts by foreign actors, particularly those linked to China, to replicate American technological advances.
In response, a spokesperson for China’s embassy in Washington criticized what they described as unfair treatment of Chinese companies, while emphasizing the country’s growing role as a center for innovation.
Major tech firms like D-Wave Quantum Inc. (NYSE: QBTS) are keeping close tabs on the existing geopolitical tensions between Washington and Beijing, because the situation is potentially especially impactful in the technology industry.
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