Manus AI to Delete Data to Comply with China, Resume Operations Independently
Manus AI will delete user and operational data to comply with Chinese laws and resume standalone operations.
Why it matters: Legal teams managing cross-border data must navigate conflicting U.S. and Chinese regulations impacting AI companies’ operations and compliance strategies.
- China’s National Development and Reform Commission blocked Meta’s $2 billion deal to acquire Manus AI in April 2026 over national security concerns.
- Meta began unwinding the acquisition by cutting Manus AI’s access to internal systems and stopping data transfers.
- Manus AI will delete specified user and operational data to comply with China's Cybersecurity Law and Data Security Law before resuming independent operations.
- Tencent, an early investor, is leading efforts to repurchase Manus AI at the previously agreed $2 billion valuation after the blocked deal.
Manus AI, founded by Chinese engineers and headquartered in Singapore, was acquired by Meta in December 2025 for $2 billion. However, in April 2026, China's National Development and Reform Commission (NDRC) blocked the acquisition citing national security risks.
Following the regulatory intervention, Meta initiated unwinding actions by restricting Manus AI's access to Meta's internal data systems and halting associated data transfers, effectively suspending integration processes.
To satisfy Chinese data protection mandates, Manus AI plans to delete defined categories of user and operational data. This action aligns with requirements under China’s Cybersecurity Law and Data Security Law, which regulate data storage and cross-border data flows to protect national security.
During the deal's disruption, Manus AI grew its annual revenue from approximately $100 million to between $400 and $500 million, according to market reports.
Tencent, an early Manus AI investor, is now leading acquisition efforts to repurchase the company at the original $2 billion price point. Tencent President Martin Lau highlighted the company’s autonomous AI technology as a key asset driving renewed investment, as reported by Tom’s Hardware.
This case underscores the increasing legal complexity for AI firms operating internationally amid intensified regulatory oversight. Legal professionals must address the intersection of Chinese national security regulations and global data privacy laws to effectively manage risk and compliance strategies.
By the numbers:
- $2 billion — value of Manus AI acquisition blocked by China’s regulator
- April 2026 — NDRC blocked the Meta-Manus AI deal
- $400–$500 million — Manus AI’s estimated annual revenue growth amid deal disruption
Yes, but: While Manus AI complies by deleting data, ongoing regulatory scrutiny adds uncertainty to multinational AI operations' long-term compliance pathways.
What's next: Pending regulatory approvals for Tencent’s proposed repurchase of Manus AI and further clarity on China’s evolving AI data rules will shape the company’s independent operations trajectory.