China blocks Metaʼs $2 billion deal to buy AI startup “Manus”. Whatʼs happening

Chinese regulators have ordered Meta to cancel a deal to acquire artificial intelligence app “Manus” for $2 billion, amid competition between Washington and Beijing for dominance in this area.

The Financial Times writes about this.

It’s an unusual move by Beijing to intervene late in a deal between two non-Chinese companies. Meta reported its acquisition of “Manus” in December 2025, a deal that closed earlier this year. The “Manus” from Meta app still lists Singapore-based Butterfly Effect as the developer on the App Store. Meta has already begun integrating “Manus” software.

It is unclear how a deal could be scrapped at this stage. A source familiar with Beijing’s decision said it was more of a signal and warning for future deals. He said the move was “quite tough and clearly aimed at stopping further deals [like ʼManusʼ]. It’s actually difficult to break a deal that’s already in place, so it’s more about sending a signal and building leverage ahead of the Xi-Trump summit”.

The announcement comes ahead of an expected meeting next month between the US President Donald Trump and Chinese President Xi Jinping to discuss lingering trade tensions.

Beijing had previously called the deal a “plot” aimed at weakening the country’s technological base. Regulators began investigating the deal in January to see if it violated investment rules. Officials have been examining the deal from a variety of angles, from export controls to investment and competition laws.

In March, two of the “Manus” co-founders were banned from leaving China while the investigation continues. China’s National Development and Reform Commission eventually said it was banning “foreign investment” in “Manus” and demanded the deal be canceled in accordance with the law.

Meta has not yet commented on the situation. The company previously stated that the deal was fully compliant with the law and was awaiting resolution of issues with Chinese authorities.

To break the deal, Meta would likely have to sell the asset to a new buyer, return it to previous investors, or find new partners, which is difficult because the company has already integrated “Manus” into some of its products.

“Manus” allows you to create personal AI agents that can independently perform complex tasks, manage files, and even create software. The development company Butterfly Effect was founded in China in 2022, but after investment from the American fund Benchmark Capital, it moved its headquarters to Singapore.

• This is the second major case of Beijingʼs interference in international deals, following the sale of 43 ports by the “CK Hutchison” to a consortium led by “BlackRock”. In that case, the Chinese authorities insisted on the participation of a Chinese company in the deal, which is still not completed.

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