Beijing Torpedoes Meta's $2bn Manus AI Deal

China's state planner orders Meta to unwind its acquisition of AI agent startup Manus on national security grounds, forcing a full reversal of the $2bn deal.

China's state planner has ordered Meta to unwind its acquisition of AI agent startup Manus, blocking the $2bn deal on national security grounds and dealing a sharp blow to Mark Zuckerberg's artificial intelligence ambitions.

The National Development and Reform Commission announced the decision on Sunday, concluding a months-long investigation that saw Manus co-founders barred from leaving the country. Meta must now refund the purchase price, isolate all acquired data and delete it, according to people familiar with the order.

Manus, a Chinese-founded startup registered in Singapore, builds autonomous AI agents capable of executing complex multi-step tasks across applications. Meta acquired the company in December 2025 and had already integrated its technology into Ads Manager and Instagram. The reversal forces Meta to rip out systems it spent four months embedding across its advertising infrastructure.

The decision arrives weeks before a scheduled Trump-Xi summit, underscoring Beijing's determination to retain control of strategic AI capabilities regardless of diplomatic costs. China has simultaneously introduced new rules requiring government approval for any US investment in Chinese AI companies, a direct response to the Manus affair.

The block signals Beijing views homegrown AI development as a sovereign priority. Chinese competitors including DeepSeek, Alibaba's Qwen and ByteDance stand to benefit as Manus talent and technology remain within the domestic ecosystem.

Meta shares fell in pre-market trading on the news. The company has not yet issued a public statement on the ruling.

The ruling sets a precedent that will chill future cross-border AI acquisitions and reinforces the deepening bifurcation of the global AI industry along US-China lines.