A major AI deal between Meta and a Chinese startup is being reversed after regulators in China ordered the transaction to be cancelled.
Meta has started undoing its $2 billion deal with AI startup Manus after Chinese regulators ordered that the agreement should not continue. The report says Meta is now separating its systems from Manus and cutting off access between both companies as part of the process to reverse the deal.
Manus staff have been blocked from Meta’s internal tools, while Meta employees can no longer use Manus systems. This marks the beginning of a full separation between both companies after months of integration work. The order from Beijing means the deal must be reversed, raising concerns about how major AI deals involving companies from different countries are handled.
Regulators in China are said to have raised concerns about control of advanced AI technology and how it could be used if foreign companies gain access. The deal was valued at about $2 billion and was seen as an important move for Meta as it tried to strengthen its position in artificial intelligence tools and systems.
Manus is a startup known for building software that can perform tasks like research, writing code, and automating digital work with little human input.
Before the order to stop the deal, the company had already been gaining attention in the AI space due to its fast growth and early adoption of its tools by developers. Meta is now working on separating data systems, tools, and internal access as part of the breakup process.
In practical terms, this means both companies are now unlinking systems that were previously connected during the acquisition process. Manus founders are now involved in discussions about what happens next for the company after the separation. These discussions include how the company will operate independently again.
China has been tightening rules around foreign involvement in sensitive sectors such as artificial intelligence, semiconductors, and data systems. These rules are part of a wider effort by regulators to maintain control over technologies seen as strategically important.
For Meta, the development is a setback in its broader plan to expand its artificial intelligence capabilities through acquisitions and partnerships. The company has not publicly stated what its next step will be after the order, but the separation process is already ongoing according to the report.
Experts say this type of case could affect future deals between US and Chinese tech companies, especially in areas linked to artificial intelligence. Some analysts believe companies may now face stricter approval processes or more conditions before cross-border AI deals are allowed.
Others say this could push big tech firms to focus more on building AI systems internally instead of acquiring startups. For Manus, the reversal means returning to full independent operations after being partially integrated into Meta’s systems.
The company had been seen as a rising player in AI tools that help automate work and handle complex digital tasks. With the deal now being unwound, both companies are returning to separate paths in a highly competitive AI market.
At this stage, neither Meta nor Manus has provided detailed public comments on how long the separation process will take or what final structure will remain after the order is fully carried out.
For now, both sides are following the directive from regulators as the process of undoing the deal continues step by step.
The outcome of this case is expected to influence how future AI acquisitions involving global tech companies are structured and approved.
