China Blocks Meta's $2 Billion Acquisition of AI Startup Manus

Chinese authorities have forced Meta to abandon its planned $2 billion acquisition of Manus, a startup building autonomous AI agents. Beijing cited foreign investment regulations as the basis for the decision, according to Bloomberg.

The Deal and Why It Collapsed

News of Meta's agreement to acquire Manus first surfaced in December 2025. Manus develops general-purpose autonomous AI agents capable of independently handling complex tasks such as market research, code generation, and data analysis. The startup's technology acts as a bridge, converting the capabilities of large language models into actionable workflows.

The transaction drew opposition from both sides of the geopolitical divide. Washington has been seeking to restrict funding flowing to Chinese firms involved in artificial intelligence. Beijing, for its part, did not disclose specifics about the cancellation, but the decision likely stems from concerns about valuable technology being transferred to a geopolitical rival.

Manus's founders originally operated in China but relocated the company's headquarters and key staff to Singapore in 2025. The jurisdictional shift, however, proved insufficient to sidestep regulatory barriers.

Ke Yan, a technology analyst at Singapore-based DZT Research, described the case as a turning point, noting that Beijing made clear that the location of a legal entity is not the decisive factor.

Why This Matters

The collapse of the Meta-Manus deal underscores the tightening grip both superpowers are exerting over cross-border AI investments. For technology companies, the precedent introduces a new layer of uncertainty: relocating a headquarters to a third country no longer guarantees deal approval when a company's origins trace back to China. This could reshape M&A strategies across the AI sector, where competition for top talent and cutting-edge technology continues to intensify.

Meta Pivots to Energy Partnerships for AI Infrastructure

Alongside the failed acquisition, Meta announced two new partnerships aimed at securing reliable power supplies for its AI infrastructure and data centers.

The first agreement is with Overview Energy, a company working on beaming space-based solar power to Earth with a capacity of up to 1 GW. Overview Energy's satellites operate in geostationary orbit where sunlight is constant, collecting energy in space and transmitting it to ground-based power plants as low-intensity near-infrared light. The approach is designed to boost the output of existing power stations through round-the-clock generation.

The second partnership involves Noon Energy, which will deploy ultra-long-duration energy storage systems. Noon Energy uses modular reversible solid-oxide fuel cells and carbon-based storage, delivering over 100 hours of energy storage capacity. The goal is to provide Meta's data centers with continuous clean and reliable power.

Previously, in November, Meta began trading electricity to accelerate the construction of new power generation facilities across the United States. Securing adequate energy remains one of the critical challenges for companies scaling AI infrastructure.