China's Revocation of Manus Deal Raises Concerns Over Cross-Border AI Deals

The saga of Manus, an AI startup caught in the crossfire between China and the US, has come to an end. The company's founders, Xiao Hong and Ji Yichao, were prohibited from leaving China after Beijing forced Meta to reverse its $2 billion acquisition of Manus in April 2026.

The move was part of Beijing's strategy to prevent the acquisition of Chinese AI talent and intellectual property by US companies. Despite being headquartered in Singapore since 2025, Manus' technology and talent remained within reach of Chinese authorities.

The reversal of Meta's acquisition has raised concerns for foreign tech firms about the safety of cross-border AI deals. Beijing's new outbound investment framework, which came into effect on July 1, provides authorities with wider powers to review foreign investments associated with technology, data, and national security.