The regulatory standoff over Meta’s acquisition of AI startup Manus has escalated sharply after Chinese authorities imposed exit bans on two of Manus’s co-founders.
This has shown Beijing’s enforcement posture shifting from administrative review to direct personal restriction.
Manus CEO Xiao Hong and Chief Scientist Ji Yichao have both been barred from leaving mainland China, according to reports by the Financial Times and Reuters on March 25.
The two are free to move within the country but cannot travel internationally. The restrictions were imposed following questioning sessions in Beijing, where authorities focused on how Manus restructured itself ahead of the Meta deal.
This is a significant shift from where things stood in January, when China’s Ministry of Commerce had launched a formal review under export control and technology transfer rules.
At the time, the most likely near-term scenario appeared to be a prolonged regulatory process that could slow but not necessarily block the transaction. The exit bans change that calculus considerably.
Central to the investigation is what regulators describe as a deliberate effort by Manus to escape Chinese oversight. Throughout 2025, the company wound down its Chinese operations, relocated its headquarters to Singapore, and replaced state-linked investors with US venture capital.
The strategy was intended to allow the company to present itself as a Singapore-based entity for the purposes of the Meta deal.
Chinese authorities and regulators are examining whether the core AI agent intellectual property was moved to the Singapore entity without the required government approvals.
The specific concern is the Regulations on Technology Import and Export Administration, which requires government sign-off for transferring certain categories of technology developed in China. Advanced AI agents seemingly appear to fall under that classification.
This mirrors the scrutiny regulators applied to TikTok, which has long been cited as a cautionary example of what Beijing calls ‘Singapore-washing.’
The January review of the Manus deal explicitly invoked these concerns, and the exit bans suggest that investigators may have found enough during questioning to move from observation to enforcement.
Meta announced the acquisition of Manus late in December 2024 in a deal the company framed as its entry into autonomous agent AI.
Manus had reached $100 million in annualized recurring revenue, making the deal attractive as Meta sought to catch up with competitors that had moved faster into AI.
With Xiao Hong and Ji Yichao unable to travel outside China, integration with Meta’s global teams is effectively stalled. Both are physically separated from Meta’s headquarters and the engineering teams they would need to work alongside.
Meta has not publicly commented on the exit bans as of publication. Enterprise customers of Manus, who were already signaling discomfort in January amid the initial review, are likely to accelerate that shift given the added instability.
How this resolves will carry weight beyond the two companies. If Beijing succeeds in forcing a restructuring or extracting significant concessions, it will establish that China’s regulatory reach extends to the people and technology behind a company even after a completed foreign acquisition.
