China blocks Meta's purchase of Manus, a profitable AI startup from the PRC

Chinese authorities have derailed Meta's $2.5 billion purchase of Manus, even though the startup had moved its headquarters to Singapore beforehand. The episode shows that, for Beijing, an AI company's origin matters more than its formal jurisdiction when sensitive technologies are involved.

Why the deal was stopped

China's National Development and Reform Commission (NDRC) conducted a security review and demanded that the deal, signed in late 2025, be unwound. The regulator's statement gave no detailed explanation, but its wording boiled down to a ban on foreign investment under current laws and rules.

For Meta this is particularly painful: it was not a minority funding round but the full acquisition of one of the most visible AI startups of Chinese origin, one that had already embedded itself in the international ecosystem.

The key point is that Manus tried to defuse political risks in advance. Before the deal, the company moved its headquarters from China to Singapore, hoping to ease access to foreign capital and reduce the influence of Chinese authorities. This scheme used to be called "Singapore washing": the business keeps its 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 that pulling a promising AI asset out from under its control will be much harder than before.

What sets Manus apart

Manus appeared in spring 2025 and quickly became one of the most talked-about AI agents. The company pitched its product not as another chatbot but as a system to which real tasks can be delegated: from screening job candidates to planning trips and analyzing an investment portfolio. The startup even claimed its agent was stronger than OpenAI's Deep Research.

The pitch matched a new market demand: investors and corporations no longer settle for polished demos, they want tools that can automate specific work.

Interest in Manus was fueled not only by promises but also by economics. The startup said that within its first eight months it reached $100 million in profit and was growing about 20% a month. In an AI market where many companies still live on expectations, that is almost an anomaly. It was this combination of product and revenue that made it an especially attractive target for a large buyer.

The key figures at the time:

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

"We will change the way people and AI interact, moving from simple questions and answers to real delegation of tasks,"

Manus said.

Why Meta wanted it

For Meta, interest in Manus looked entirely rational. Investors are increasingly scrutinizing the company's enormous spending on AI infrastructure and data center construction, especially when it is financed with debt. Against that backdrop, a profitable agent startup is a rare asset that can be presented not only as a bet on the future but as a business with clear monetization today. For Mark Zuckerberg's team, it was a chance to buy not just technology but a working model for commercializing AI agents.

judging by the integration, both sides expected to close the matter quickly. By March 2026, about 100 Manus employees were already working in Meta's Singapore office, and the founders had been given leadership roles there; CEO Xiao Hong, according to the report, was due to report directly to Chief Operating Officer Javier Olivan.

But the deal irritated more than just Beijing. In the US, Senator John Cornyn publicly questioned investing American capital in a company with Chinese ties. In other words, Manus found itself squeezed between two political centers at once.

What this means

The Manus case shows that the era of cross-border AI acquisitions will be defined by more than valuations, revenue and model quality. If a startup is tied to China, the question of control over its team, data and intellectual property can at any moment outweigh market logic. For major players, the signal is clear: even moving headquarters and actually integrating the team no longer guarantee that a deal will be allowed to close.

*Meta is recognized as an extremist organization and banned in Russia.