In December 2025, Meta acquired Manus, a Singapore-based AI startup with roots in China, for over $2B. The deal closed quickly, investors were paid, and Manus employees have already joined Meta's AI team.
Quick History: Manus AI, originally called Butterfly Effect, was founded in China in 2022, two months before ChatGPT's public launch. The company released its first product, a ChatGPT-powered browser extension, in 2023 and closed its Series A round in 2024. In June 2025, the company moved its headquarters from Beijing to Singapore and laid off most of its Beijing-based staff, with the rest moving to Singapore. By December 2025, when Meta acquired it, Manus had reached over $125M in ARR.
Well, fast forward four months, and China wants the two companies to unwind the deal — though no one is exactly sure at this moment how that would work or whether the order can actually be enforced. Manus co-founders Xiao Hong and Ji Yichao have been barred from leaving China since March while China's National Development and Reform Commission has been investigating the deal over potential violations of China's technology export control laws, and now the commission has ordered the deal to be unwound.
That's got to suck, right? To become an instant billionaire and then have China be like “nuh uh, uh!” and ban you from leaving the country.
A Meta spokesperson said in a statement:
“The transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.”
So what's China's argument then?
China believes that even though Manus relocated to Singapore in mid-2025, its intellectual property and technical team were developed in China with state support, making the AI agent subject to Chinese export control and foreign investment laws. The NDRC's position is that jurisdictional control follows where technology is built and who builds it, not where a holding company is incorporated, and that Meta and Manus failed to notify Chinese authorities before finalizing the deal.
It's worth noting that this is the first time China's NDRC has ordered the unwinding of a closed deal under its Foreign Investment Security Review mechanism, setting a precedent that could affect any U.S. company looking to acquire a Chinese-founded startup, including startups incorporated abroad.