Meta begins dismantling $2 billion Manus acquisition following Chinese regulatory order

Meta Platforms has taken concrete steps to dismantle its $2 billion acquisition of Manus, an agentic AI startup with Chinese roots that had relocated its headquarters to Singapore before the deal was announced in December. Meta has ordered employees to stop using Manus tools for internal projects and blocked Manus staff from accessing Meta's internal data systems, completing what Bloomberg described as an operational split. Chinese regulators issued an unprecedented order in April to reverse the completed deal under China's foreign investment security review mechanism, giving Meta a two-week deadline to comply. Legal experts say the case is a major test case for China's technology controls, with Beijing also rolling out sweeping new rules effective July 1 that formalize its authority to intervene in — and even unwind — completed overseas transactions involving Chinese investors, technology, data, or national security concerns. The framework extends Beijing's jurisdiction beyond mainland China, including to markets such as Taiwan, and specifically bans cross-border talent transfers in sensitive sectors without government approval. Analysts warn the episode signals that 'Singapore washing' — relocating to obscure Chinese origins — has clear limits, and that Chinese-origin AI assets now carry an inherent 'reversibility risk' for any acquirer. Separately, Chinese chip stocks fell broadly on the day, with SMIC, Hua Hong Semi, Metax Integrated Circuits, and Cambricon Technologies all declining between 4% and 6%, reflecting wider market anxiety over the intensifying U.S.-China tech rivalry.