Meta is preparing to unwind its acquisition of AI startup Manus after Chinese regulators blocked the deal on national security grounds, marking another major escalation in cross-border tech restrictions.

Reuters reported that Beijing ordered Meta to reverse its $2 billion+ acquisition of Manus and restore the company’s Chinese assets to their original state, including any transferred technology or data. Regulators have reportedly given only several weeks to complete the reversal.

The case highlights China’s increasingly strict stance on foreign investment in frontier technologies such as artificial intelligence, semiconductors, and advanced software.

For Middle Eastern investors, this creates new opportunities. Gulf sovereign wealth funds are increasingly becoming preferred alternative capital partners for Asian startups facing tighter U.S.-China investment restrictions.

From a business perspective, the move could reshape global venture capital flows, forcing startups to rethink fundraising strategies and international expansion plans.

Looking ahead, analysts expect tighter regulatory screening across AI deals globally, especially where data sovereignty and national security concerns are involved.

Source : Reuters.