Tech giant Meta (formerly Facebook) is preparing to reverse its acquisition of artificial intelligence startup Manus after Chinese regulators explicitly refused to approve the deal, according to a report by the Wall Street Journal on April 28, 2026. The episode highlights the escalating geopolitical tensions in the global AI sector and the growing challenges facing cross-border technology mergers.

Meta had previously planned to acquire Manus, a company focused on artificial general intelligence (AGI) development, as part of its strategy to strengthen its position in the rapidly intensifying AI competition. However, China’s State Administration for Market Regulation (SAMR) rejected the acquisition application, citing national security and data protection concerns.

According to sources familiar with the matter, Meta has begun preparing the legal and commercial framework to unwind the transaction. The company faces a difficult situation: without Chinese approval, Manus’s operations in the Chinese market would be severely impacted, and that business represents a critical component of Manus’s overall valuation and future growth trajectory. As a result, proceeding with the deal is no longer commercially viable.

Analysts note that this is yet another manifestation of the ongoing US-China technology decoupling trend in the AI domain. In recent years, China has tightened its scrutiny of technology transactions involving foreign capital, particularly in critical sectors such as artificial intelligence, semiconductors, and cloud computing. Simultaneously, the United States has repeatedly restricted Chinese technology companies from operating in its market on national security grounds.

In a statement, Meta said: “We are evaluating various options to ensure the maximization of the company’s strategic interests.” The company did not comment on a specific timeline for unwinding the deal.

The incident is likely to have far-reaching implications for the future M&A landscape in the global AI industry. As governments around the world elevate the strategic importance of AI technology, cross-border tech acquisitions will face an increasingly complex geopolitical approval environment. Investors and technology companies planning cross-border transactions will need to more carefully assess regulatory risks across different jurisdictions.

Source: Wall Street Journal, Al Jazeera