China pulls the plug on Meta’s $2B AI deal

The Financial Times, CNBC, Reuters, and Bloomberg contributed to this report.

Meta’s push to snap up rising AI startup Manus just hit a wall – and it’s coming from Beijing.

China’s top economic planner stepped in Monday and told both sides to walk away from the $2 billion acquisition, effectively killing the deal months after it was announced. The regulator said the decision followed existing laws, without going into much detail, but the message was blunt: unwind the transaction.

This one had been under a microscope from the start. Beijing opened a probe back in January, while officials in Washington were already wary of US money flowing into companies with Chinese roots. That double scrutiny made the deal politically tricky long before it fell apart.

Meta, for its part, had insisted everything checked out legally. As recently as March, the company said the acquisition “complied fully with applicable law” and expected things to move forward. That optimism didn’t last.

Manus isn’t just another startup. Founded in China before relocating to Singapore, it built a name around general-purpose AI agents – tools designed to handle complex tasks like coding, research, and data analysis. The company scaled fast, crossing $100 million in annual recurring revenue within months of launching its product, a pace that turned heads across the industry.

The relocation to Singapore was part of a broader trend – startups shifting headquarters to sidestep tightening rules on both sides. That strategy is now looking a lot shakier. Beijing’s intervention signals it’s not keen on letting key AI players slip too far out of its orbit, even if they’ve technically moved.

For Meta, the blocked deal is a setback in its effort to bulk up AI capabilities across its platforms, including its virtual assistants and enterprise tools. For founders and investors watching closely, it’s something else: a reminder that in AI, geopolitics can override the business case overnight.