China Blocks Meta’s $2B Manus AI Deal Amid Rising Tech Tensions

China has blocked Meta’s planned $2 billion acquisition of Manus, as CNBC writes, a move that highlights growing restrictions around AI deals and cross-border tech investments.

According to reports, the decision came from China’s National Development and Reform Commission, which intervened despite Manus being headquartered in Singapore. The startup focuses on agentic AI systems designed to automate complex, multi-step tasks, an area Meta has been actively expanding into.

Regulatory pressure blocks Meta’s AI expansion

Meta first announced the deal in December as part of its broader push to strengthen its AI portfolio. At the time, Manus co-founder Xiao Hong welcomed the partnership, signaling strong alignment between the two companies. However, the agreement never reached completion.

Chinese regulators ultimately canceled the acquisition, pointing to compliance requirements and increasing oversight of foreign involvement in AI-related businesses. Even though Manus operates out of Singapore, its Chinese roots placed it under Beijing’s regulatory scope, which continues to apply to many startups founded by Chinese nationals abroad.

Rising geopolitical tensions reshape tech deals

The decision reflects a broader trend. China has tightened control over strategic sectors like artificial intelligence, especially when foreign companies attempt to acquire or partner with domestic-linked firms. This approach limits how easily Chinese-founded startups can engage in deals with U.S. tech giants.

At the same time, geopolitical tensions between the United States and China continue to shape the global tech landscape. U.S. officials have raised concerns about intellectual property risks tied to AI collaborations. In a recent memo, Michael Kratsios accused China of large-scale IP theft in the AI sector, adding further pressure to already strained relations.

The collapse of the Meta-Manus deal signals how difficult cross-border AI partnerships have become. Regulatory barriers, national security concerns, and competing strategic interests now play a central role in shaping such transactions.

In parallel developments, Meta is reportedly planning to lay off around 8,000 employees as it reallocates resources toward artificial intelligence. The company has also partnered with Broadcom to develop custom AI chips, underscoring its long-term commitment to the space despite setbacks.

Via Neowin