Chinese regulators have blocked the $2 billion deal between Meta and Manus in its final stages, restricting foreign investment.
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The Chinese government has blocked the acquisition of Chinese AI startup Manus, which was being sought by US technology company Meta. Facebook's parent company Meta had agreed to buy Manus for around $2 billion four months ago.
China's regulatory body, the National Development and Reform Commission, has ordered the final phase of the deal to be halted, citing foreign investment in advanced AI technology as prohibited under foreign investment protection policies, Reuters reported.
With this decision, it is clear that Beijing has taken a stricter policy on cross-border technology and transactions related to artificial intelligence (AI) technology made in China. This will also directly affect Meta's AI expansion plans.
China-based AI startup Manus had moved its operations to Singapore and re-registered after attracting US investment. Meta bought it to strengthen its AI agent technology.
It is claimed that Manus can operate autonomously compared to other chatbots that require repeated prompts. The deal between Meta and Manus is in the final stages, and Chinese employees have been furloughed and its main operations have been moved to Singapore, but the Chinese regulator has stopped the purchase and sale process after months of review. The company's co-founders have been summoned for discussions with regulators and even banned from leaving the country, according to a Reuters report.
Meta said in a brief response, "Since our transactions and agreements are in accordance with applicable laws, we expect a proper resolution to this matter."
China's decision comes as competition between American and Chinese technology in the AI sector is intensifying, with each country trying to block the expansion of the other's technology. Just last week, Chinese regulators had instructed their country's AI companies and startups not to accept American investment without government permission.
Reuters has reported that companies like Moonshot and Stepfun, which are preparing to receive US capital investment, have been affected by the directive. TikTok's parent company ByteDance has also been affected by the latest directive from Chinese regulators, and analysts suspect that the Chinese government may also hinder TikTok's US operating agreement.
Laila Khawaja, an expert on the subject, told Bloomberg, "China has clearly tightened its grip on preventing its technology from going elsewhere and has expanded its surveillance of foreign investment." Meanwhile, the move comes ahead of a much-anticipated meeting between US President Donald Trump and Chinese President Xi Jinping, which is expected to take place in mid-May, and is also being seen as a political message.
