Meta Platforms’ proposed acquisition of enterprise AI startup Manus AI, reportedly valued at around $2.5 billion, including retention packages, has hit a regulatory roadblock after China barred the foreign takeover and ordered the parties to unwind the transaction.

The decision was issued by the office under the National Development and Reform Commission (NDRC), which oversees China’s foreign investment security review mechanism. According to China Daily, the move was taken in accordance with national security regulations, reflecting tighter scrutiny of cross-border deals involving advanced technologies.

Manus AI, originally founded in China and now headquartered in Singapore, has rapidly emerged as a high-growth player in the enterprise AI space. The company was valued at approximately $500 million in May following a $75 million Series B round, but has since reportedly surpassed $100 million in annual recurring revenue within months of launching its platform.

The startup specialises in general-purpose AI agents capable of autonomously executing enterprise tasks such as market research, coding, data analysis, and recruitment screening. Its subscription-based model targets corporate clients seeking multi-functional AI automation beyond traditional chatbots.

Following its latest funding round, Manus relocated its China-based workforce to Singapore, a move aimed at mitigating geopolitical and regulatory risks as it expanded globally. However, the latest decision highlights that cross-border AI deals involving Chinese-origin technologies remain highly sensitive.

For Meta, the acquisition would have marked its first major push into enterprise AI services, positioning it more directly against competitors such as Microsoft, Google, Salesforce, and OpenAI, all of which are investing heavily in agent-based AI for business applications.

The blocked deal underscores the growing intersection of AI innovation and national security considerations. As global tech giants race to commercialise agentic AI, regulatory barriers, particularly in geopolitically sensitive markets, are increasingly shaping the trajectory of high-value acquisitions.