China's Regulator Blocks Meta's $2 Billion Acquisition of AI Startup Manus

China's National Development and Reform Commission decided on Monday to block Meta's $2 billion acquisition of Manus, a Singaporean AI startup with Chinese roots. The commission asked Manus and Meta to withdraw the acquisition transaction. The decision to prohibit foreign investment in Manus was made in accordance with laws and regulations, the commission stated.

Meta announced the $2 billion takeover plan of Manus in December. Beijing launched a probe into the Meta-Manus acquisition transaction in January. In January, China's Ministry of Commerce said it would conduct an assessment and investigation into the acquisition's compliance with laws and regulations concerning export controls, technology import and export, and overseas investment.

A Meta spokesperson said in March that the acquisition complied fully with applicable law. Shares were 0.2% lower in premarket trading on Monday.

Manus was founded in China before relocating to Singapore. Manus develops general-purpose AI agents. Manus's AI agent can execute complex tasks such as market research, coding, and data analysis. Manus launched its first general AI agent in March last year.

Manus said it had passed $100 million in annual recurring revenue (ARR) in December, eight months on from launching a product. The company raised $75 million in a round led by U.S. VC Benchmark in April last year.

The deal had attracted scrutiny from both China and Washington, as lawmakers in the U.S. have prohibited American investors from backing Chinese AI companies directly.