When China made headlines in late April by ordering the unwinding of Meta’s $2 billion acquisition of Manus AI, the story quickly became a flashpoint at the intersection of artificial intelligence, national security, and global investment policy — areas where Sarah Bauerle Danzman associate professor of International Studies at the Hamilton Lugar School of Global and International Studies and a non-resident senior fellow at the Atlantic Council, is one of the country’s leading voices.
The Washington Post turned to Bauerle Danzman for her analysis of China’s extraordinary decision, issued by the National Development and Reform Commission, to prohibit “the foreign acquisition of the Manus project” and require the parties to unwind the completed transaction. Manus AI, founded by Chinese engineers and later relocated to Singapore, was acquired by Meta in December 2025. Beijing’s move marked one of the most aggressive efforts yet to prevent what Chinese officials have called “China-shedding” — the practice of homegrown AI companies severing ties with China to access capital and resources abroad.
Bauerle Danzman noted that resolving the dispute is unlikely to be simple, and that the political dynamics surrounding U.S.-China relations will significantly shape the outcome. She observed that for Meta to recover the acquisition, the matter would need to be elevated to the highest levels of government: “Mark Zuckerberg would have to go to Trump and say, ‘This has to be a top priority during your summit with Xi’; then it just gets thrown on the pile, and I very much doubt that this is going to be a top priority for the president when he talks to Xi.”
The case is notable not only for its scale, but for the questions it raises about the reach of China’s 2020 national security review mechanism — which was designed for Chinese-based firms — and whether it can be applied to companies that have already shifted operations overseas. Analysts, including Bauerle Danzman, suggest a resolution will require diplomatic as much as legal maneuvering, at a time when U.S.-China relations on AI are already fraught.
Bauerle Danzman’s expertise on the political economy of foreign direct investment and investment security is directly relevant to these fast-moving developments. A former Council on Foreign Relations International Affairs Fellow who worked as a policy advisor in the U.S. Department of State’s Office of Investment Affairs, she brings both academic and practitioner perspectives to bear on issues that are reshaping global technology and capital flows. She also serves as director of the Tobias Center for Innovation in International Development at IU.
Students interested in the forces shaping global investment, economic statecraft, and the politics of AI governance can explore these themes in Bauerle Danzman’s courses, including INTL I103 Global Business, INTL I310 Global Economic Governance, and upper-division seminars on foreign investment and geoeconomic statecraft.
Read the full Washington Post article, "China says it wil reverse major AI acquistion by Meta," or learn more about Bauerle Danzman’s research on economic security and global investment at the Hamilton Lugar School.