China Cancels Meta's $2B AI Acquisition

China just handed Meta a big AI headache. Beijing on Monday ordered Meta to unwind its reported $2 billion purchase of Manus, a Singapore-based artificial intelligence firm founded by Chinese engineers, saying the deal violated restrictions on foreign investment and tech exports, per the New York Times. China's powerful National Development and Reform Commission barred foreign capital from Manus, which has a Chinese parent company and offices in Beijing and Wuhan, and instructed the sides to reverse the acquisition, even though Meta has described the teams as "deeply integrated" and working side by side in Singapore.

The move, following a probe launched in January and arriving weeks before a planned meeting between Chinese President Xi Jinping and US President Trump, fits a broader effort by Beijing to keep cutting-edge AI talent and technology from moving offshore. Manus was founded in China before shifting to Singapore, a move tech leaders hoped would shield it from Beijing's scrutiny. But the "Singapore-washing" model has now been called into question, per CNBC. The scrutiny could complicate fundraising for other Chinese AI startups looking to foreign investors. Meta, which has said the deal complied with the law, did not immediately comment on the order.