China blocks Meta's acquisition of Manus, a profitable AI startup from China

Chinese authorities blocked Meta's $2.5 billion acquisition of Manus, even though the startup had previously moved its headquarters to Singapore. The story shows that for Beijing, the origin of an AI company matters more than formal jurisdiction when it comes to sensitive technologies.

Why the Deal Was Stopped

China's National Development and Reform Commission (NDRC) conducted a security review and demanded the deal, concluded in late 2025, be cancelled. The regulator's statement lacked detailed explanation, but the wording amounted to a ban on foreign investment under existing laws and regulations. For Meta, this was particularly painful: it wasn't a minority round, but a full acquisition of one of the most prominent Chinese-origin AI startups, which had already managed to integrate into the international ecosystem.

The key point is that Manus had tried to mitigate political risks in advance. Before the deal, the company moved its headquarters from China to Singapore, hoping to simplify access to foreign capital and reduce the influence of Chinese authorities. Such a scheme was previously called "Singapore laundering": the business retains Chinese roots but presents itself as a more neutral international structure.

The NDRC's decision shows that this route no longer guarantees protection. Beijing is clearly signaling: it will be much harder to extract a promising AI asset from its control than before.

What Makes Manus Special

Manus emerged in spring 2025 and quickly took its place among the most discussed AI agents. The company promoted its product not as yet another chatbot, but as a system to which you could delegate real tasks: from recruiting candidates to trip planning and investment portfolio analysis. Against this background, the startup even claimed its agent was stronger than OpenAI's Deep Research.

This approach aligned well with new market demand: investors and corporations no longer want just polished demos; they need tools capable of automating actual work. Interest in Manus was fueled not only by promises but also by economics. The startup said it had already reached $100 million in profit within the first eight months and was growing roughly 20% per month.

For the AI market, where many companies still live on expectations, this is almost an anomaly. It was precisely the combination of product and revenue that made it an especially attractive target for a major buyer.

• Benchmark led a $75 million funding round just weeks after launch
• after that, the company was valued at $500 million
• in the first eight months, Manus reported $100 million in profit
• monthly growth, according to the startup, reached 20%

"We will change how people interact with AI, moving from simple questions and answers to true task delegation,"

Manus stated.

Why Meta Needed It

For Meta, interest in Manus looked entirely rational. Investors are looking more critically at the company's massive AI infrastructure spending and data center construction, especially when financed by debt. Against this backdrop, a profitable agent startup — a rare asset that can be shown not just as a bet on the future, but as a business with clear monetization right now.

For Mark Zuckerberg's team, this was a chance to buy not just technology, but a working model for AI agent commercialization. Based on the integration's progress, both sides expected to close the deal quickly. By March 2026, around 100 Manus employees were already working at Meta's Singapore office, and the founders had taken leadership roles there; CEO Xiao Hong, according to reports, was supposed to report directly to Chief Operating Officer Javier Olivan.

But the deal irritated not only Beijing. In the US, Senator John Cornyn publicly questioned American capital investments in a company with Chinese ties. In other words, Manus found itself trapped between two political centers at once.

What It Means

The Manus story shows that the era of cross-border AI acquisitions will be determined not only by valuations, revenue, and model quality. If a startup is connected to China, the question of control over the team, data, and intellectual property can at any moment outweigh market logic. For major players, this is a signal: even headquarters relocation and actual team integration no longer guarantee that a deal will be allowed to go through to completion.