Meta Platforms (META) Shares Decline After China Vetoes $2B+ Manus AI Acquisition

Key Highlights

• Chinese regulators officially prevented Meta’s planned purchase of AI company Manus this Monday
• The social media giant had announced plans to acquire Manus last December for over $2 billion
• Two key executives from Manus were prevented from departing China in March amid the regulatory examination
• China’s NDRC directed all involved parties to terminate the transaction
• This decision demonstrates Beijing’s strategy to retain control over critical domestic AI technology

Meta Platforms had been aggressively expanding its presence in the artificial intelligence agent market. Last December, the company revealed its intention to purchase Manus — an advanced AI agent developed by Butterfly Effect, a startup originally established in China but headquartered in Singapore.

According to analysts at Bloomberg Intelligence, the acquisition carried a valuation exceeding $2 billion.

Manus had gained significant attention in early 2024 when Chinese government media outlets touted it as the nation’s answer to DeepSeek, following the launch of what the company described as the globe’s first comprehensive AI agent. The technology demonstrated capabilities including resume screening and automated construction of stock analysis platforms.

Meta Platforms, Inc., META

However, market observers immediately identified substantial regulatory obstacles, considering the intensifying technological competition between Washington and Beijing.

These warnings ultimately materialized.

Chinese Authorities Intervene

The situation escalated dramatically in March. Manus executives Xiao Hong (CEO) and Ji Yichao (chief scientist) received summons to Beijing and were instructed they could not exit Chinese territory during the regulatory assessment period. Both executives typically operate from Singapore.

This Monday, China’s National Development and Reform Commission issued a formal rejection of the transaction. The regulatory body announced it would “prohibit the foreign investment in the acquisition of the Manus project” and mandated that all participants cease involvement in the deal.

Officials stated the determination was reached “in accordance with laws and regulations,” providing no additional explanation.

Industry experts are analyzing this development carefully. Manus had transferred its primary operations from mainland China to Singapore — a strategic maneuver employed by numerous Chinese enterprises attempting to minimize vulnerability to US-China geopolitical friction. However, this relocation provided no safeguard in this instance.

Alfredo Montufar-Helu from Ankura China Advisors noted the ruling demonstrates that restrictions previously concentrated on semiconductor technology are now encompassing artificial intelligence. “China is saying we will prevent foreign acquisition of assets we consider important for national security — and AI is now clearly one of them,” he said.

Meta announced in December the acquisition would “bring a leading agent to billions of people and unlock opportunities for businesses across our products.” The company has not yet released a statement regarding Monday’s regulatory rejection.

The NDRC’s decision may become a discussion point during the scheduled mid-May meeting between President Trump and President Xi Jinping.

Meta stock declined 2.41% following the announcement.

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