Meta is preparing to unwind its approximately $2 billion acquisition of the agentic AI startup Manus after China’s National Development and Reform Commission formally ordered the deal’s cancellation on Monday, the Wall Street Journal reported, citing people familiar with the matter.

Beijing has given Meta and Manus a preliminary deadline of several weeks to reverse the transaction and fully restore Manus’s Chinese assets to their original state. Neither Meta nor Manus had publicly confirmed the unwind preparation at the time of publication.

The new detail from the Journal is operationally significant. Monday’s NDRC cancellation order, established that China had issued a formal prohibition on the deal.

Tuesday’s reporting establishes that the prohibition carries a concrete compliance deadline and specifies the required outcome: restoration of Manus’s Chinese assets to their pre-acquisition state. That is a more specific and more demanding requirement than a simple cancellation order.

It implies that some portion of the Manus entity, assets, or operational infrastructure remains legally in China and must be disentangled from Meta’s ownership before the deadline expires.

What exactly constitutes “Chinese assets” for a company that was incorporated in Singapore and employed primarily Singapore-based founders is a question that lawyers for both Meta and Manus will be spending the next several weeks resolving under Chinese regulatory supervision.

The situation in terms of the broader precedent being set. China’s decision to press for the unwinding of a completed deal involving a company that had legally relocated to Singapore is “a step unlike anything it’s tried before.”

The NDRC’s jurisdiction claim rests on the argument that Manus, despite its Singapore incorporation, retained sufficient connections to China, through its founders, its technical development origins, its data, or its institutional knowledge, to be subject to Chinese foreign investment security review.

That claim, if not legally challenged, becomes the template for every subsequent case of a Chinese-founded AI company incorporated abroad seeking to exit to a US acquirer.

The absence of a detailed legal rationale is, in itself, a signal: China is asserting the right to block such transactions without creating a public precedent that could be challenged in international arbitration.

The NDRC’s one-line statement, “prohibit foreign investment in the Manus project in accordance with laws and regulations”, is precisely as short as it needs to be to accomplish the result without providing legal handholds for contestation.

For Meta, the operational consequences are emerging rapidly. The company paid approximately $2 billion for an agentic AI team and technology it will now be required to return in some form to Chinese regulatory satisfaction.

The financial loss is bounded, Meta has $70 billion in cash and can absorb the write-down. The strategic loss is less bound: Meta had positioned Manus as a foundational acquisition for its agentic AI capabilities, which are central to its AI product roadmap for 2026 and 2027.

Whether the Manus technology, platform, or team can be reconstituted outside of China’s regulatory reach, in Singapore, in the US, or in a structure that satisfies the NDRC’s requirements while preserving Meta’s access to the capability it paid for, is the question the next several weeks will answer.