April 27 (Reuters) - Meta Platforms is preparing to unwind its acquisition of artificial intelligence startup Manus after China blocked the deal on national security grounds, the Wall Street Journal reported on Monday, citing people familiar with the matter.
Earlier on Monday, China ordered the U.S. tech major to unwind its $2 billion-plus acquisition of Manus, as Beijing tightens scrutiny of U.S. investment in domestic startups developing frontier technologies.
According to the Journal report, the Singapore-based
AI startup's investors, which include venture capital firm Benchmark, have already received their returns.
Meanwhile, several former Manus investors in Asia, including Tencent, HSG and ZhenFund, are planning to cooperate if Meta proceeds with unwinding the deal, the report said.
Beijing has given the two companies a preliminary deadline of several weeks to reverse the transaction and fully restore Manus's Chinese assets to their original state, the Journal reported, adding that this would include removing any data or technology previously transferred from Meta.
Chinese regulators have also considered imposing penalties on Manus and Meta if the deal cannot be fully rescinded, the report added.
Meta and Manus did not immediately respond to a Reuters' request for comment.
The move comes weeks ahead of a planned mid-May summit in Beijing between U.S. President Donald Trump and Chinese President Xi Jinping.
China's commerce ministry announced an investigation into the sale in January, days after Meta completed the acquisition.
(Reporting by Akanksha Khushi in Bengaluru; Editing by Sumana Nandy)
