China Orders Meta to Unwind $2 Billion Acquisition of Manus
April 27, 2026 – 9:37 am
The NDRC’s Office of the Working Mechanism for Foreign Investment Security Review issued a formal cancellation order on Monday, four months after the deal was announced. Manus co-founders Xiao Hong and Ji Yichao have been barred from leaving China since March.
China’s National Development and Reform Commission has formally ordered Meta to unwind its $2 billion acquisition of Manus, the agentic AI startup, in a brief statement issued by the Office of the Working Mechanism for Foreign Investment Security Review on Monday.
The NDRC’s instruction represents the end of a four-month regulatory process that began almost immediately after the deal was announced in December 2025, escalated to exit bans on Manus’s co-founders in March 2026, and has now concluded with China’s most direct intervention in a US technology acquisition of a Chinese-founded company since the beginning of the current trade war cycle.
Manus was founded by Xiao Hong (CEO) and Ji Yichao (Chief Scientist) in China and incorporated in Singapore, a common structure for Chinese AI startups seeking international investment while maintaining operational roots in China. The company emerged in early 2025 as one of the most technically impressive agentic AI platforms, capable of autonomously executing complex multi-step tasks across web browsers, code editors, and file systems without requiring human supervision at each step.
The acquisition sparked concern within the Chinese government not about the $2 billion price or Meta’s market position in China (Meta’s consumer apps are already blocked), but about what category of asset was being transferred. China’s Ministry of Commerce launched a formal probe in January 2026, framing its review around export control laws and what constitutes a technology export when the asset being transferred is not a conventional product but a team, a system, and operational know-how embedded in a Chinese-founded and Chinese-trained organisation.
That framing, "is an AI team an export?", is the regulatory question the Manus case has forced into the open, and it has no settled answer in any jurisdiction.
Chinese authorities had barred Xiao Hong and Ji Yichao from leaving the country after summoning them to Beijing for questioning by the NDRC on potential violations of foreign direct investment rules. The pair, based in Singapore, were told they could not leave China after attending those meetings.
The Washington Post reported last week that the Manus case had revealed what Chinese tech workers described as “a new red line”: the point at which a Chinese-founded, Singapore-incorporated AI company becomes subject to Chinese state oversight over its operations and intellectual property.