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China's state planner on Monday called for Meta to unwind its $2 billion acquisition of Manus, a Singaporean AI startup with Chinese roots. The decision to prohibit foreign investment in Manus was made in accordance with laws and regulations, the National Development and Reform Commission said in a brief statement. It added that it has asked the parties involved to withdraw the acquisition transaction. CNBC has contacted Meta for comment. Shares were 0.2% lower in premarket trading. The deal had attracted scrutiny from both China and Washington, as lawmakers in the U.S. have prohibited American investors from backing Chinese AI companies directly. Meanwhile, Beijing has increased efforts to discourage Chinese AI founders from moving business offshore.
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The Chinese government's intervention in the transaction drew alarm among tech founders and venture capitalists in the country that were hoping to take advantage of the so-called "Singapore-washing" model, where companies relocate from China to the city state to avoid scrutiny from Beijing and Washington. Manus was founded in China before relocating to Singapore. The company develops general-purpose AI agents and launched its first general AI agent in March last year, which can execute complex tasks such as market research, coding, and data analysis. The release saw the startup lauded as the next DeepSeek. Manus said it had passed $100 million in annual recurring revenue (ARR) in December, eight months on from launching a product, which it claimed made it the fastest startup in the world at the time to hit the milestone from $0. The company raised $75 million in a round led by U.S. VC Benchmark in April last year.