The Chinese government said on Monday that it would require the unwinding of Meta’s acquisition of Manus, a Singapore-based artificial intelligence company with Chinese founders, in a move that could chill other Chinese entrepreneurs from seeking tie-ups with foreign partners.
Chinese officials had said in January they were investigating whether Meta’s acquisition of Manus last December violated the country’s rules on foreign investment. They were also assessing whether the deal violated China’s requirements that companies obtain approval for the export of certain technologies.
The National Development and Reform Commission, a high-level ministry that oversees economic planning and plays a central role in setting China’s A.I. policy, said on Monday that it had decided to prohibit foreign investment in Manus, and instructed the parties involved to withdraw the acquisition.
It is not clear how such a transaction would be unwound. Meta has described the two teams as “deeply integrated.” Members of the Manus team have been working alongside Meta colleagues at the company’s office in Singapore, according to two people familiar with the operation who spoke on condition of anonymity because they were not authorized to talk publicly.
Meta did not immediately respond to a request for comment. The company previously said that the transaction had fully complied with applicable law.
The Chinese government issued its decision just a few weeks before a planned meeting between President Trump and China’s leader, Xi Jinping.
The New York Times reported last month that officials from the Chinese agency had called in Meta and Manus executives to express concerns about the deal, and that Manus executives had been restricted from departing China, as part of an apparent effort to discourage Chinese A.I. executives from moving businesses offshore.
As companies in China and the United States race to develop cutting-edge artificial intelligence, the scrutiny could make it harder for other Chinese firms to attract funding from foreign investors. It could also signal to Chinese researchers not to follow the path Manus took, in which Chinese executives register companies outside China to sidestep regulations from both Washington and Beijing.
Manus is based in Singapore but was founded by Chinese engineers and had a Chinese parent company. The company was incorporated offshore and set up in China as a foreign-owned entity; it has affiliated offices in Beijing and Wuhan.
Many Chinese tech founders hope to attract Silicon Valley investors. But in recent years, they have increasingly found themselves needing to choose between targeting the Chinese market or moving their headquarters outside China to court foreign investors.
Jianggan Li, chief executive of Momentum Works, a consultancy in Singapore, said that scrutiny like the Manus deal is facing “will make it increasingly hard for Chinese A.I. founders who started in China to sit on both sides or switch to the other side.”
“There are already a lot of uncertainties starting an A.I. start-up, and most founders are technologists but not politically savvy,” Mr. Li said.
Meta has been spending billions on A.I. researchers and data centers, and its acquisition of Manus formed a rare direct link between talent from both the United States and China.
In recent years, Chinese companies have made up a large share of Meta’s advertising revenue. Meta said on a call with analysts in 2024 that China-based advertisers accounted for 10 percent of its revenue, almost double the amount two years earlier. China’s start-ups that offer games, short video apps and e-commerce have flooded Facebook and Instagram with ads as they look to establish a presence outside China.
Xinyun Wu contributed research from Taipei.
