China's National Development and Reform Commission (NDRC) has ordered Meta to reverse its completed $2 billion acquisition of AI startup Manus, escalating the tech rivalry between the US and China. The deal, announced in December and closed earlier this year, saw Meta acquire Manus to bolster its AI capabilities against OpenAI and Google.
The unwinding is complicated since Meta has already integrated Manus technology into its own products. According to the Financial Times, likely resolutions include selling the unit to a new buyer or returning it to its original investors.
Founded in 2022 as Butterfly Effect, Manus moved its headquarters to Singapore after a funding round led by Benchmark Capital. Chinese regulators had scrutinized the deal since January, restricting the co-founders' travel in March. Beijing labeled the acquisition a "conspiratorial" attempt to drain China's tech talent.
A source familiar with the NDRC's thinking described the order as "pretty harsh," signaling a strong deterrent against similar deals and serving as leverage ahead of the upcoming Xi-Trump summit.