China Vetoes Meta’s $2 Billion Manus Deal After Months-Long Probe

China’s National Development and Reform Commission (NDRC) on April 27, 2026, ordered Meta Platforms and agentic-AI startup Manus to terminate their roughly $2 billion acquisition, formally prohibiting foreign investment in the Manus project “in accordance with laws and regulations.” The brief statement gave no detailed reasoning, but it caps a months-long review by Beijing that began shortly after Meta announced the deal in December 2025.

Manus was founded in 2022 by Xiao Hong, Yichao Ji, and Tao Zhang under the parent company Butterfly Effect, originally headquartered in Beijing before relocating to Singapore in mid-2025. The startup became one of the most talked-about agentic-AI companies of 2025, building general-purpose web agents that can plan and execute multi-step tasks. Meta moved aggressively to fold that technology into Meta AI, and by March 2026 roughly 100 Manus employees had already moved to Meta’s Singapore offices, with CEO Hong reporting to Meta COO Javier Olivan. Backers including Tencent and HongShan Capital had also already received their share of the proceeds.

The block lands awkwardly because, on paper, the deal was effectively done. Meta has integrated Manus into its internal systems and product roadmap, and unwinding that kind of operational tie-in is rare. Complicating matters further, Hong and Chief Scientist Ji are reportedly subject to exit bans preventing them from leaving mainland China while the matter is unresolved. A Meta spokesperson told TechCrunch that “the transaction complied fully with applicable law” and that the company “anticipates an appropriate resolution to the inquiry,” signaling Meta will push back rather than walk away.

Beyond the immediate fallout, the decision is being read as one of China’s most significant interventions in a cross-border tech deal and a clear signal that Beijing now views frontier AI talent and agent technology as strategic assets it does not want flowing to U.S. tech giants. The move also drew attention in Washington, where lawmakers including Senator John Cornyn had already raised concerns about the deal’s Chinese origins. For Mark Zuckerberg, who has staked Meta’s next chapter on becoming a leader in AI agents, losing Manus — or being forced to restructure the deal — would be a meaningful setback in an increasingly geopolitical AI race.