China’s National Development and Reform Commission (NDRC) has ordered Meta to unwind its acquisition of Manus, an agentic AI startup, dealing a potential blow to the company’s push into AI agents. The decision was announced on Monday, April 27, 2026.
The NDRC offered no explanation for the ruling, stating only that it had “made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations” and required both parties to withdraw the transaction. Meta responded through a spokesperson: “The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.”
Meta announced its acquisition of Manus in December 2025 for roughly $2 billion to $3 billion, with plans to integrate its agent technology into Meta AI. Manus was founded in 2022 by Xiao Hong, Yichao Ji, and Tao Zhang, who originally established the company’s parent, Butterfly Effect, in Beijing before relocating headquarters to Singapore around mid-2025.
The unwinding will not be straightforward. Approximately 100 Manus employees had already moved into Meta’s Singapore offices as of March 2026, with founders taking on executive roles. CEO Xiao Hong now reports directly to Meta COO Javier Olivan. Complicating matters further, Hong and Chief Scientist Yichao Ji are reportedly under exit bans, preventing them from leaving mainland China.
The deal has also attracted scrutiny in Washington. Senator John Cornyn raised concerns about Benchmark’s investment in Manus, questioning whether American capital should be flowing to a Chinese-linked firm.
The NDRC’s intervention marks one of China’s most significant moves to block a cross-border deal in the AI sector. For Meta, the ruling could disrupt its strategy in the fast-moving AI agents space, where Manus’ technology was set to play a central role.
Source: TechCrunch