Beijing’s Deadline for Chinese Asset Recovery and Data Removal

Beijing has ordered Meta to reverse its $2 billion acquisition of Chinese artificial intelligence startup Manus, setting a tight deadline for the restoration of all Chinese assets and the removal of any transferred data or technology, according to reports verified by multiple primary sources.

Regulators Demand Full Reversal of Deal

Chinese regulators have given Meta and Manus a preliminary deadline of “several weeks” to unwind the transaction, The Wall Street Journal reported, citing people familiar with the matter. The order requires the full restoration of Manus’s China-based assets to their original state, including the deletion of any data or technology previously transferred to Meta. The directive underscores Beijing’s growing scrutiny of cross-border technology deals, particularly those involving sensitive AI and data infrastructure.

The acquisition, announced earlier this year, had positioned Meta to expand its AI capabilities by integrating Manus’s research and development operations. Manus, which relocated its headquarters to Singapore in 2025, had retained significant assets in China, including research labs and data centers. The Chinese government’s intervention now forces Meta to dismantle the deal, despite the company’s efforts to comply with local regulations.

Meta and Manus Respond to Deadline

Neither Meta nor Manus has publicly commented on the specific timeline or the steps being taken to comply with Beijing’s demands. However, sources familiar with the matter told The Wall Street Journal that the companies are working to meet the deadline, though the process is expected to be complex and resource-intensive. The reversal involves not only the physical repatriation of assets but also the erasure of any proprietary technology or data that may have been shared during the acquisition process.

The order reflects broader tensions between China’s regulatory environment and foreign technology firms. Beijing has increasingly prioritized control over domestic data and AI development, imposing strict oversight on cross-border transactions involving critical technologies. The Manus deal, valued at over $2 billion, had drawn particular attention due to its potential implications for China’s AI sector, which the government views as strategically vital.

Implications for Meta and Global AI Competition

The forced unwinding of the Manus deal represents a significant setback for Meta, which had sought to bolster its AI research through the acquisition. The company has been investing heavily in AI-driven products, including advanced language models and virtual reality applications, and the loss of Manus’s expertise could delay these efforts. Analysts suggest that the reversal may also deter other foreign tech firms from pursuing similar acquisitions in China, given the regulatory risks.

For China, the move aligns with its long-term strategy of maintaining sovereignty over key technological sectors. The National Financial Regulatory Administration (NFRA) and other regulatory bodies have been granted expanded authority to oversee foreign investments in sensitive industries, including AI, semiconductors, and biotechnology. The Manus case is likely to serve as a precedent for future transactions, signaling to multinational corporations that compliance with Chinese law will be strictly enforced.

Broader Context: China’s Regulatory Crackdown

The decision to block the Meta-Manus deal is part of a broader pattern of regulatory actions targeting foreign technology firms in China. In recent years, Beijing has introduced a series of laws aimed at tightening control over data security, cybersecurity, and cross-border data flows. These measures have included the Data Security Law, the Personal Information Protection Law, and the Cybersecurity Law, all of which impose strict requirements on how companies handle and transfer data.

The NFRA, which oversees financial and regulatory compliance, has also extended programs designed to manage bad loans and asset transfers, further restricting the movement of capital and technology across borders. While these policies are framed as efforts to protect national security, they have raised concerns among foreign businesses about the predictability of operating in China’s market.

What Comes Next

Meta and Manus face a tight timeline to comply with Beijing’s demands, with the preliminary deadline looming in the coming weeks. The companies are expected to prioritize the restoration of Manus’s Chinese assets, though the technical and legal challenges of reversing the acquisition remain substantial. Industry observers will be closely watching how the situation unfolds, as it could set a precedent for future cross-border deals in China’s tech sector.

For now, the forced unwinding of the deal highlights the growing divide between China’s regulatory priorities and the global ambitions of multinational technology firms. As Beijing continues to assert control over its digital economy, foreign companies may need to reassess their strategies for entering or expanding in the Chinese market.