China Halts Meta's Acquisition of Manus, Demanding Withdrawal of $2 Billion Deal
On April 27th, China's National Development and Reform Commission (NDRC) required US tech giant Meta to withdraw its acquisition of Manus, an AI startup originally founded in China but later relocated to Singapore. Meta had announced plans to acquire the company for $2 billion last December.
China's National Development and Reform Commission stated in a brief statement on the same day that the decision to prohibit foreign investment in Manus was made in accordance with relevant laws and regulations, and has requested the parties involved in the transaction to withdraw the acquisition arrangement.
Meta's stock price fell 0.2% in pre-market trading.
The deal has been closely watched by both China and the United States since its announcement. Reports indicate that US lawmakers had previously banned US investors from directly investing in Chinese AI companies; at the same time, China is also increasing its efforts to prevent Chinese AI entrepreneurs from moving their businesses abroad.
The Chinese government's intervention has sent shockwaves through China's tech startup and venture capital circles. Some practitioners had hoped to circumvent scrutiny from both China and the United States by using the so-called "Singapore whitewashing" model – relocating companies from China to Singapore to reduce regulatory pressure from Beijing and Washington.
Data shows that Manus was initially founded in China and later moved to Singapore. The company primarily develops general-purpose AI agents and launched its first general artificial intelligence agent product in March of last year, capable of performing complex tasks such as market research, programming, and data analysis. Following the product launch, Manus was once referred to by outsiders as the "next DeepSeek."
Manus had also stated that the company achieved $100 million in annual recurring revenue (ARR) in December of last year, just 8 months after the product launch, claiming it was the fastest startup globally to reach this milestone from scratch.
In April of last year, Manus completed a $75 million funding round led by US venture capital firm Benchmark.
When Meta announced the acquisition at the end of last year, it stated that the company hoped to accelerate AI innovation for enterprise customers and integrate more advanced automation capabilities into its products for both consumers and businesses, including the Meta AI assistant.
However, in January of this year, China's Ministry of Commerce stated that it would assess and investigate whether the acquisition complied with relevant laws and regulations regarding export controls, import and export of technology, and outbound investment.
A Meta spokesperson told CNBC in March that the acquisition was "fully compliant with applicable laws" and that the company team expected the investigation to be "appropriately resolved."
Regarding China's halt to Meta's acquisition of Manus, Chen Xu, Chairman of the APEC Senior Officials' Meeting, responded to a reporter's question, stating, "It is important that all parties act in a mutually beneficial spirit." However, he also stated that he was not familiar with the specifics of the issue and said, "If such issues can be properly addressed, it will help promote more substantive discussions within APEC."
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