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Tech advocates and analysts once imagined a world in which talent, capital, and ideas would flow freely between China and California. The blocked acquisition of Chinese artificial intelligence firm Manus by U.S. giant Meta is another moment when the fantasy of seamless globalization smashes into the hard wall of national security politics.

On April 27, the office coordinating China’s foreign investment security review mechanism, housed under the National Development and Reform Commission (NDRC), retroactively prohibited Meta’s acquisition of the Singapore-based Manus in December and ordered the parties to unwind the transaction. It’s a frustrating moment for the Chinese tech sector, despite it being used to taking hard blows from the government. Chinese AI start-ups have long aspired to “go global” to the United States. For AI companies, the global market, with its high-paying customers, looks more attractive than China’s crowded domestic battlefield. Global capital markets are deeper and more abundant.

Tech advocates and analysts once imagined a world in which talent, capital, and ideas would flow freely between China and California. The blocked acquisition of Chinese artificial intelligence firm Manus by U.S. giant Meta is another moment when the fantasy of seamless globalization smashes into the hard wall of national security politics.

On April 27, the office coordinating China’s foreign investment security review mechanism, housed under the National Development and Reform Commission (NDRC), retroactively prohibited Meta’s acquisition of the Singapore-based Manus in December and ordered the parties to unwind the transaction. It’s a frustrating moment for the Chinese tech sector, despite it being used to taking hard blows from the government. Chinese AI start-ups have long aspired to “go global” to the United States. For AI companies, the global market, with its high-paying customers, looks more attractive than China’s crowded domestic battlefield. Global capital markets are deeper and more abundant.

There’s a well-known playbook for doing this, whether you call it “Singapore-washing,” “China-shedding,” or regulatory arbitrage: build the core capabilities in China; migrate the corporate shell to Singapore or another neutral jurisdiction; clean up the capitalization table and dismantle the Chinese base; and then sell to a U.S. tech giant or list offshore.

Manus seemed to embody the dream of taking a local success global. Launched in 2025 as a general-purpose AI agent, it was marketed as China’s answer to the era of agentic AI. It went viral almost instantly, with Benchmark leading a $75 million round. Meta later moved to acquire the company for a shocking $2 billion.

But the very magnitude of Meta’s offer, which made Manus’s success so dazzling, also did not bode well. The NDRC’s order to dismantle the deal has raised a series of questions.

Manus’s position in China’s AI ecosystem matters. Manus was not a foundation-model company in the DeepSeek mold, which makes the forced unwind especially curious. Unlike........

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