China blocks Meta-Manus deal amid rising scrutiny over AI tech transfers

In a significant development, China has officially blocked Meta Platforms from acquiring the AI startup Manus, marking a setback for one of the most anticipated cross-border deals in the artificial intelligence sector. The announcement came from the National Development and Reform Commission (NDRC), China's leading economic authority, which declared that foreign investment in the Manus initiative would be prohibited, directing all parties involved to halt the transaction. This decision effectively terminates Meta's attempt to acquire the AI firm known for its innovative technology. The deal, which was reportedly nearing completion, had drawn the attention of Chinese regulators who were concerned about the potential transfer of advanced AI capabilities to the United States. Scrutiny intensified when the Ministry of Commerce initiated a review in January, assessing whether the acquisition aligned with existing regulations on technology exports, foreign investments, and national security. Manus, which rose to prominence in March 2025 after showcasing what it claimed to be the world’s first general AI agent capable of performing tasks autonomously, was initially viewed as a standout example of a Chinese-founded startup aiming for global reach. However, growing apprehensions within China regarding the potential loss of critical intellectual property to a rival nation prompted a comprehensive investigation into the deal. The Chinese government's intervention highlights a tightening control over valuable AI technologies, particularly those with national security implications. The country expanded its technology export control framework in 2020 to encompass certain algorithms, granting regulators enhanced authority to prevent the overseas transfer of sensitive technologies. This situation unfolds amid escalating tensions between the US and China in the tech sector. Washington has implemented stricter restrictions on American investments in Chinese AI and semiconductor firms, while Beijing is increasingly focused on protecting domestic innovation. For Meta, this setback is a reminder of the longstanding challenges faced in navigating the regulatory landscape in China, where Facebook has been banned since 2009, and efforts to reestablish a foothold in the market have consistently encountered obstacles.