What the NDRC ordered
On April 27, 2026, four months after Meta's acquisition of Manus had closed, the National Development and Reform Commission's Office of the Working Mechanism for Foreign Investment Security Review ended its review with a short statement. It had made a decision to prohibit foreign investment in the Manus project in accordance with laws and regulations, and required the parties involved to withdraw the acquisition transaction. Meta's response was equally brief: the transaction complied fully with applicable law, a spokesperson said, and the company expected an appropriate resolution to the inquiry. Manus did not comment. [3][5]
The instrument behind the order is the Foreign Investment Security Review Measures, known as Order No. 37, which the NDRC and China's commerce ministry issued jointly in 2021. Article 12 of the measure lets the agency prohibit a transaction it judges to touch national security through key technology or critical infrastructure, and to order the parties to take necessary measures to restore the pre-investment state even after closing. This was the first publicly disclosed case of an AI-sector deal blocked under Order No. 37 since it took effect. [4]
The deal being unwound
Manus began in 2022 as a project inside Butterfly Effect, a Beijing-founded company that later took venture funding from the US firm Benchmark and relocated its registered headquarters to Singapore. Meta announced the acquisition on December 29, 2025, at a price reporting put above $2 billion, with Meta absorbing Manus's staff and integrating the agent product into its own push into AI agents. [6]
Multiple Chinese regulators, including the NDRC, the commerce ministry and the antitrust watchdog, had been reviewing the deal since January 2026. In March, authorities barred Manus's two cofounders from leaving China, a step tied to the ongoing inquiry. Chinese officials characterized the acquisition as a conspiratorial effort to hollow out the country's domestic technology base, the language that framed the review well before the April order arrived. [7][6]
Why "unwind" is not simple
The order arrived after facts on the ground had already moved past the pre-investment state it demanded. Roughly 100 Manus employees had relocated into Meta's Singapore offices, and Meta had begun folding Manus's agent technology into its own products. The NDRC's statement named no timeline, no recipient for a divested Manus, and no mechanism for separating technology that had already been integrated. [3]
Atlas interpretation: Restoring the pre-investment state is a legal instruction, not an operational plan, and Order No. 37 does not specify how a completed integration gets reversed. A straight handback to Manus's prior owners was one option discussed; a spinoff or a sale to a different buyer was another. Which path Meta and Manus actually took is outside this page's coverage window and belongs on a later page, not this one. [4][6]
An outbound version of a familiar control
Atlas interpretation: Coverage of the review framed its underlying question as whether an AI team, not just a chip or a model weight, counts as something that can be exported. Chinese authorities reviewed the transfer of talent, operational systems and know-how from a Chinese-founded organization to a US acquirer, rather than a conventional technology transfer, and commentators described the resulting order as the first clear marker of a formal Chinese framework for screening AI-related outflows on national security grounds. [5]
Atlas interpretation: The timing carried its own signal. One account of the decision described it, through an unnamed source, as a verbal warning aimed at similar deals and as leverage built ahead of a planned Xi-Trump summit, rather than a case decided purely on its own facts. Lawyers who track Order No. 37 read the order the same way: a message to founders and acquirers considering the next cross-border deal involving a Chinese-founded AI team, independent of whether Manus itself was ever returned to its prior owners. [6][7]
Sources
- China blocks Meta's $2 billion takeover of AI startup Manus
CNBC · Apr 27, 2026
- China blocks Meta from acquiring AI startup Manus
NPR · Apr 27, 2026
- China vetoes Meta's $2B Manus deal after months-long probe
TechCrunch · Apr 27, 2026
- China Blocks Meta's Acquisition of AI Firm Manus on National Security Grounds
MMLC Group · Sep 8, 2026
- China orders Meta to unwind its $2 billion acquisition of Manus
TNW · Apr 27, 2026
- Meta's $2 Billion Deal To Buy AI Startup Manus Blocked By China
Forbes · Apr 27, 2026
- China blocks Meta's $2 billion acquisition of AI startup Manus
The Decoder · Apr 27, 2026