On April 27, the Office of the Working Mechanism for Security Review of Foreign Investment, under the National Development and Reform Commission (NDRC), officially issued an announcement. In accordance with laws and regulations, the office reached a decision to prohibit foreign investment in the Manus project and explicitly required the involved parties to rescind the acquisition transaction.
This marks the first time since the official implementation of the Measures for Security Review of Foreign Investment (《外商投资安全审查办法》) in 2020 that Chinese authorities have publicly halted a foreign merger and acquisition in the Artificial Intelligence (AI) sector, representing the most severe administrative ruling under this mechanism to date.
The Manus project was previously hailed as a "second DeepSeek moment" for developing the "world's first general-purpose AI agent." Its parent company, Butterfly Effect, was founded by the post-90s Chinese entrepreneur Xiao Hong (肖弘). In December 2025, the U.S. social media giant Meta officially announced its total acquisition of Manus for approximately $2 billion, which was initially regarded as the third-largest acquisition in Meta's history. However, the deal subsequently triggered intense controversy regarding "wash-out style globalization" and the loss of core technology. Regulatory investigations revealed that Manus abruptly moved its headquarters to Singapore just before the transaction, conducted mass layoffs of its domestic team, and wiped its domestic social media accounts, leading to suspicions of evading China's export controls and data security reviews.