China orders Meta to unwind its $2B purchase of AI startup Manus

In short: China’s top economic planner told Meta to reverse its $2 billion purchase of AI startup Manus, even though the deal closed months ago.

What happened

China’s National Development and Reform Commission, or NDRC, ordered Meta Platforms to unwind its acquisition of Manus on April 27, 2026. The deal had already closed in December 2025, and Meta had paid about $2 billion.

The NDRC’s public notice was very short and gave little detail. It said foreign investment in Manus is prohibited under national laws, without explaining which laws or what specific risk China sees.

Manus is incorporated in Singapore, but it has Chinese roots. Reports say the company started in China under a project called Butterfly Effect, then moved its headquarters and intellectual property to Singapore in 2025. Intellectual property means the company’s valuable know-how, like its software designs and methods (similar to a recipe).

After the acquisition, Manus employees were integrated into Meta teams in Singapore and California, according to reports. The company’s founders, Xiao Hong and Ji Yichao, who are Chinese citizens, reportedly faced exit bans in Beijing starting in March 2026.

Why it matters

This move shows that where a tech startup is legally registered may not be enough to avoid Chinese government control if the company has strong ties to China. It also adds another barrier for US companies that want to buy or invest in AI firms connected to China, during a period of rising tension over advanced technology. For regular people, it can affect which companies get access to certain AI features, and how quickly those tools show up in products you use.

Source: NYTimes