AI Under Guard

Beijing Stops Meta’s Takeover

China has ordered Meta to unwind its $2 billion purchase of AI startup Manus. Manus started out in Beijing but recently relocated to Singapore.

Meta announced the purchase in December 2025, hoping it would help the Instagram and WhatsApp parent compete against Anthropic and other companies developing “agentic” AI tools, capable of carrying out multi-step tasks autonomously. Manus was among the first companies to showcase an AI agent back in March 2025.

Chinese regulators called the deal “conspiratorial”, arguing it risked draining China’s talent and early‑stage innovation.

Manus as a National Security Case

This is the most direct move China has made so far to protect its homegrown AI industry against foreign acquisitions.

China’s National Security Commission, headed by President Xi Jinping himself, ordered the deal to be blocked. This signals that AI companies are now treated as strategic assets, not ordinary start‑ups. And China is trying to extend its regulatory reach beyond its borders.

Manus’s founders were invited to China in March to discuss violations of foreign investment rules. They have been barred from leaving the country.

China’s AI Leader Fails to Wow

A move to keep Manus within Chinese control came as China’s AI crown jewel DeepSeek released a preview of its latest model, V4. It failed to recreate last year’s shock that briefly sent AI stocks around the world diving. Back then, it stunned investors with a strong performance despite limited computing power.

• V4 Pro: strong, but now just one of many top open models
• Rivals: Chinese competitors Kimi and Qwen have caught up
• Pricing: DeepSeek cut V4 Pro by 75%, showing that competition is heating up

The surprise factor is gone. What matters now is whether China can keep improving under tight US chip restrictions. Local companies still don't have access to Nvidia's most advanced chips.

The Star Behind DeepSeek

The most impressive thing about DeepSeek’s new model isn’t its performance. It’s that DeepSeek has adapted the model to run well on Huawei’s chips. These Chinese homegrown chips are still less powerful than Nvidia’s high-end American ones, but Huawei links thousands of them together so they act like one larger system.

That lets V4 run inside China without relying on US hardware. Availability of the DeepSeek's latest model is limited due to computing shortages, but prices should fall once Huawei’s chips go into mass production later this year. It’s a major step for China toward domestic AI hardware.

China’s AI Future

Together, the Manus block and Huawei’s increasingly capable chips show how China is building and controlling its AI talent and AI computing power.

Stopping Meta sends a warning: strategic AI companies cannot simply relocate and sell to foreign buyers.

DeepSeek’s shift toward Huawei chips shows China can keep advancing even under US export limits. The question now is whether China can scale this into a full, homegrown ecosystem that can challenge Nvidia’s dominance in the field.