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Regulatory authorities in China have put a halt to a major US technology company’s attempt to acquire Manus, a Singapore-based artificial intelligence startup established by Chinese entrepreneurs. The Office of the Foreign Investment Security Review under the National Development and Reform Commission announced that the proposed acquisition has been prohibited, and the involved parties have been instructed to withdraw their plans. Manus has not issued a public statement yet.
The company behind a popular social media platform had announced in late December that Manus was joining its efforts to deliver cutting-edge AI solutions to billions worldwide and create new opportunities for businesses through its products. Reports indicated that the deal was valued at over $2 billion.
In early January, a spokesperson for China’s Ministry of Commerce stated that the government would investigate whether the acquisition complies with Chinese laws related to export controls, technology trade, and foreign investment.
The key issue revolves around whether Manus’ core AI technology is classified under the Chinese Catalog of Technologies that are restricted or prohibited from export, especially considering revisions made last July concerning information processing technologies, according to legal experts. The primary risk pertains to whether China-developed core technologies, such as AI algorithms and agent components, are transferred overseas through personnel, code sharing, or business relocation without an export license.
It is believed that Manus had likely crossed the threshold of technology export control when it relocated its headquarters to Singapore, and the recent acquisition attempt only highlighted this underlying concern. Experts suggest that this investigation serves not only to ensure compliance but also to refine the legal framework, prevent the loss of critical technological assets, and assert China’s authority over the cross-border flow of high-value science and tech innovations.
Founded in Beijing in 2022 by Xiao Hong and others, Manus began developing a general AI agent named after itself in late 2024. Its core team mainly comprises university graduates from institutions such as Huazhong University of Science and Technology. R&D activities are based in Beijing and Wuhan.
In April 2025, Manus secured a $75 million Series B funding round led by a prominent US venture capital firm, boosting its valuation to $500 million. By June, the company announced it would relocate its headquarters to Singapore and operate under a Singapore-based entity called Butterfly Effect.
The following month, Manus conducted extensive layoffs within its Chinese team, retaining only about 40 of its 120 essential technical staff and relocating them to Singapore. The company also cleared its Chinese social media presence and blocked access to its website from Chinese internet addresses.
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