Meta’s $2 billion acquisition of AI startup Manus was ordered to unwind by China’s National Development and Reform Commission, which cited foreign investment restrictions and demanded both parties withdraw from the transaction. The directive represents an uncommon reversal of a completed deal and halts Meta’s plan to integrate Manus’s AI agent platform.

Manus began in China before re-incorporating in Singapore under Butterfly Effect and developed an AI agent platform capable of coding, market research, and data processing. By December 2025, the startup had reached $100 million in annualized revenue within eight months, marking a record pace for early-stage AI companies.

Beijing’s Commerce Ministry opened a review in January over potential foreign investment and technology transfer violations, and Meta maintained the deal met all legal requirements and expected approval. Manus’s founders have since been restricted from leaving China, while operations at the Singapore office have continued under former employees.

The NDRC ruling underscores China’s expanding scrutiny of AI transactions and could delay Meta’s AI development roadmap and planned product automation enhancements. The decision also signals heightened regulatory risk for foreign tech deals involving Chinese-origin technology.