China has blocked Meta's $2 billion acquisition of AI platform Manus, citing violations of Beijing's investment rules. Regulators announced they would prohibit foreign investment in Manus and required the acquisition to be canceled. The decision comes ahead of an expected Trump-Xi summit next month, as the two nations compete for dominance in artificial intelligence technology amid growing tech tensions.

Manus, originally founded in China, moved its headquarters to Singapore last year following US venture capital funding. The company was subsequently acquired by Meta, which has already integrated some of Manus's tools into its products. Beijing had earlier branded the acquisition a "conspiratorial" attempt to hollow out China's tech base, reviewing the deal through multiple regulatory lenses including export controls and competition laws.

The blocked acquisition creates complex unwinding challenges for Meta. In March, Chinese authorities restricted two Manus co-founders from leaving the country during the review. Meta maintains the transaction complied with all applicable laws and anticipated an appropriate resolution to Beijing's inquiries, though the company has not yet commented on the blocking decision. The rejection reflects Beijing's tougher stance on protecting domestic AI capabilities.