China’s top economic planner has ordered Meta to unwind its acquisition of Manus, an agentic AI startup, dealing a potential blow to the social media company’s push into AI agents. The National Development and Reform Commission (NDRC) announced the decision on Monday, April 28, 2026, prohibiting foreign investment in the Manus project and requiring both parties to reverse the transaction.
“The National Development and Reform Commission (NDRC) has made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations, and has required the parties involved to withdraw the acquisition transaction,” the agency said, offering no further explanation.
Meta announced its acquisition of Singapore-based Manus in December 2025 for roughly $2 billion to $3 billion, with plans to integrate the startup’s agent technology into Meta AI. Manus was founded in 2022 by Xiao Hong, Yichao Ji, and Tao Zhang, who originally established its parent company, Butterfly Effect, in Beijing before relocating headquarters to Singapore around mid-2025.
The unwinding will not be straightforward. Around 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.
Meta pushed back on the ruling. “The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry,” a company spokesperson told TechCrunch.
The deal had already drawn scrutiny in the United States. Senator John Cornyn raised concerns about Benchmark’s investment in Manus, questioning whether American capital should flow to a Chinese-linked firm. The NDRC’s block marks one of China’s most significant interventions in a cross-border technology deal and could affect Meta’s ability to compete in the fast-moving AI agents space.
Source: TechCrunch