China blocks Meta AI deal amid tech rivalry tensions

HONG KONG — China has blocked a proposed acquisition by Meta Platforms of artificial intelligence startup Manus, in a move that underscores rising geopolitical tensions over advanced technology.

The decision, announced Monday by the country’s top economic planning body, signals tighter scrutiny of cross-border AI deals as Beijing seeks to retain control over critical tech capabilities.

Beijing halts deal without detailed explanation

China’s National Development and Reform Commission said it had prohibited a foreign acquisition of Manus and ordered all parties to withdraw from the transaction.

Officials did not explicitly name Meta in the statement and offered no detailed explanation for the decision.

The review was conducted under China’s foreign investment security framework, which has increasingly been used to assess deals involving sensitive technologies.

AI becomes a national security priority

The blocked deal highlights how artificial intelligence has become a strategic priority in the rivalry between China and the United States.

Manus, a Singapore-based startup with roots in China, develops “general-purpose” AI agents capable of handling complex, multi-step tasks autonomously.

Meta had planned to integrate the technology across its platforms, expanding its AI capabilities in areas such as automation and user interaction.

However, Beijing appears concerned about the potential transfer of advanced technology and talent abroad.

Timing adds geopolitical significance

The move comes ahead of a planned meeting between Donald Trump and Xi Jinping, adding a diplomatic dimension to the decision.

Analysts say the timing suggests China is signaling a tougher stance on protecting its AI ecosystem amid intensifying competition with the U.S.

Meta defends the transaction

Meta said the acquisition complied with all applicable laws and expressed confidence that the issue could be resolved.

The company had previously stated that Manus would not retain Chinese ownership ties after the deal and that its operations would shift outside China.

Despite those assurances, regulators moved forward with the ban.

Broader impact on global tech deals

Experts warn the decision could have wider implications for future cross-border investments in artificial intelligence.

“This shows China is willing to play hardball when it comes to AI capabilities,” analysts noted, pointing to parallels with U.S. restrictions on Chinese tech firms.

The move may deter similar acquisitions by Western companies and deepen the technological divide between the world’s two largest economies.

AI race enters a new phase

As both countries tighten controls, the global AI landscape is becoming more fragmented.

For companies like Meta, the challenge will be balancing expansion ambitions with growing regulatory barriers — a trend likely to shape the next phase of the AI race.