China's NDRC blocks Meta's $2 billion acquisition of AI startup Manus and orders unwinding of the completed deal

China's top economic planning agency NDRC has blocked Meta's $2 billion acquisition of AI startup Manus, announced in December and closed earlier this year, and ordered the parties to unwind the deal. The agency prohibited 'foreign investment' in Manus and required cancellation of the acquisition.

Meta had acquired Manus to catch up with OpenAI and Google in the AI race and already integrated the technology into some of its own products, which complicates unwinding. Potential options include spinning off the acquisition to a new buyer or selling it back to its former investors.

Manus was founded in 2022 by Chinese startup Butterfly Effect, which moved its headquarters and core team to Singapore after a funding round led by Benchmark Capital. Multiple Chinese regulators reviewed the deal since January, including the NDRC, commerce ministry, and China's antitrust watchdog; in March, authorities restricted two Manus co-founders from leaving the country.