China seeks to block US tech giant Meta from AI acquisition

China has said it is blocking tech giant Meta from an acquisition of artificial intelligence (AI) startup Manus, tightening scrutiny of investment in domestic startups developing frontier technologies from the United States.

China’s National Development and Reform Commission (NDRC) said on Monday that it was prohibiting the foreign acquisition of Manus, without specifically naming Meta.

The move highlights Beijing’s increased concern over US acquisitions of Chinese AI talent and intellectual property, as Washington tries to limit Chinese tech firms’ access to advanced US chips.

It was not immediately clear on what grounds China was seeking the annulment of a deal involving a Singapore-based company and how, if at all, a completed acquisition transaction would be unwound.

Manus, which has Chinese roots but is based in Singapore, provides general-purpose AI agents designed to carry out complex tasks with minimal human intervention.

The call to annul the deal was made by the commission in accordance with Chinese laws and regulations, the NDRC’s statement said.

California-based Meta said in response to the statement: “The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.”

A White House spokesperson said in a statement that the Trump administration “will continue defending America’s leading and innovative technology sector against undue foreign interference of any sort”.

Meta announced in December that it was acquiring Manus. It is a rare case of a major US tech group buying an AI company with strong links to China. The deal was forecasted to help expand AI offerings across Meta’s platforms.

Meta had said there would be “no continuing Chinese ownership interests in Manus” and that Manus would discontinue its services and operations in China.

But China said in January that it would investigate whether the acquisition would be consistent with its laws and regulations.

After a $75m fundraising round led by US venture firm Benchmark in May 2025, Manus shut its China offices, laying off dozens of employees. It then moved its operations to Singapore.

This enabled Manus’s parent company, Butterfly Effect, to reincorporate ⁠in Singapore and bypass US investment restrictions on Chinese AI firms, as well as Chinese rules limiting domestic AI firms’ ability to transfer their IP and capital overseas.

The Chinese bid to block the deal comes weeks before a planned mid-May summit between US President Donald Trump and Chinese President Xi Jinping in Beijing.