‘The transaction complied fully with applicable law,’ Meta said in a statement.

China has blocked Meta’s $2bn acquisition of AI start-up Manus. In a brief statement, the country’s National Development and Reform Commission (NDRC) said that the decision to prohibit foreign investment in Manus was made in accordance with Chinese laws. It has asked the parties to withdraw from the acquisition.

In a statement to SiliconRepublic.com, a spokesperson for Meta said: “The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.” Meta did not confirm whether it would push back against the decision.

China’s decision hinders Meta’s massive AI plans to play catch up with its Big Tech competitors. The company has spent billions to acquire businesses, hire expensive executives and realign its priorities. Last week, the Facebook-owner decided to cut 8,000 jobs in a bid to run “more efficiently” and “offset the other investments” it’s making.

The company, which has budgeted $135bn in spending this year, committed to purchasing Manus late last year, followed by the viral Moltbook platform in March for an undisclosed amount.

Manus employees and executives have joined Meta, while investors including Tencent Holdings, ZhenFund and Hongshan have already received their proceeds from the acquisition, sources have told Bloomberg.

A person familiar with the matter told the Financial Times that the NDRC’s decision was “harsh”, and that it carries a “strong intention to stop follow-on deals” similar to Manus.

“In reality, it’s hard to unwind a done deal, so it is more about verbal warnings on similar deals and the leveraging building before the Xi-Trump summit,” the source added. US president Donald Trump is set to meet with his Chinese counterpart Xi Jinping next month.

Manus is headquartered in Singapore, but has a Chinese parent company called Butterfly Effect Technology. Meta acquired the company after a $75m funding round last April that valued it at $500m.

As per the now contested acquisition deal, Meta can operate and sell the Manus service, as well as integrate it into its own products. However, Manus would still be able to sell its subscriptions through its own app and website.

In February, the start-up launched ‘Manus Agents’, personal AI agents that perform similarly to the Austrian-made open source OpenClaw. The Agents, which debuted on Telegram that month, had expanded to WhatsApp shortly after. Meta did not confirm if the China’s decision would affect Manus Agents on WhatsApp.

The Chinese Ministry of Commerce launched an investigation shortly following the acquisition to determine whether Meta violated the country’s laws on technology exports and outbound investment. According to the rules, the Chinese government needs to approve the export of certain technologies, including AI.

While Bloomberg recently reported that Chinese agencies told the country’s key AI firms that they should reject capital with US origins unless explicitly approved.

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