Meta’s stock rose on Monday after Chinese regulators blocked its $2 billion deal to buy Manus, an AI startup based in Singapore. The decision directly impacts Meta’s ability to expand in AI and signals a heightened risk for international tech investments.
China’s National Development and Reform Commission told both companies to cancel the deal, saying it did not meet local rules on foreign investment. Earlier, China’s Ministry of Commerce said in January it would review the deal for export controls, technology transfer, and overseas investment rules.
Manus began in China before moving to Singapore. Many Chinese AI founders do this to attract Western investors and manage regulations in both China and the U.S. This practice, sometimes called Singapore-washing, now faces greater scrutiny as Beijing’s rejection of the Meta deal highlights increased government intervention. The move has made tech founders and investors in China uneasy and signals a tightening environment for offshore technology ventures.
The company develops general-purpose AI agents capable of performing tasks such as market research, coding, and data analysis. It reported $100 million in annual recurring revenue in December, around eight months after launching its first product. According to the company, this was a relatively quick path to that revenue level for startups. The launch attracted comparisons to DeepSeek and industry attention. Previously, Manus secured $75 million in a funding round led by U.S. venture firm Benchmark.
Meta stated that the acquisition was intended to accelerate AI innovation for businesses and enhance automation in its products, including the Meta AI assistant. The company also noted that the deal complied with all applicable laws and that it anticipated a favorable outcome from the regulatory review.
The deal drew criticism in both the U.S. and China. U.S. lawmakers want to stop American investors from funding Chinese AI companies, while China is trying to keep its AI founders from moving overseas. These tighter rules make future cross-border AI deals riskier, directly impacting the ability of Western companies and Chinese startups to access global markets and invest in each other.
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