HomeReportedly Considering Reversing the $2 Billion Manus Acquisition Amid Beijing’s Pressure
Meta has started winding down its $2 billion acquisition of Manus, officially ending operational ties with this AI startup founded in China and ceasing all data sharing between the two companies. This action represents the most concrete progress to date in fulfilling a divestiture order issued by Beijing about two months ago due to concerns over national security.
According to Bloomberg, Meta has also cut Manus off from its internal systems, preventing its employees from using Manus’ tools for internal projects as the two entities move closer to a complete separation.
As reported by May, the co-founders of Manus have held preliminary talks about raising around $1 billion from external investors in an effort to reclaim the startup from Meta. Such a move could lead to the creation of a Chinese joint venture and eventually a listing on the Hong Kong stock market, which has seen an increase in AI company listings this year, including those from firms like MiniMax and Zhipu.
What was initially seen as a significant milestone for Chinese AI companies is now falling apart at an accelerated pace. This development highlights Beijing’s firm commitment to maintaining control over technologies considered strategically important, regardless of whether a company is incorporated overseas.
In addition to the forced divestiture, Chinese authorities have tightened travel restrictions on researchers and executives from private firms, requiring government approval before they can travel abroad. The country is also strengthening oversight of foreign investment, with reports suggesting that leading AI companies such as Moonshot AI, StepFun, and ByteDance will need government approval before accepting investment from the United States. These measures add another layer to Beijing’s broader efforts to regulate its AI sector.
Even as Meta works to sever ties with Manus, the agentic AI startup has continued to release new features, including integrations with Similarweb and Shopify.
Manus gained widespread attention after a viral demonstration of its agent technology, prompting the company to relocate its staff to Singapore in mid-2025 before Meta announced its $2 billion acquisition in December. Chinese regulators began to closely examine the deal earlier that year, raising concerns about potential violations of technology export controls and foreign investment regulations.
According to the WSJ, Manus’ investors, including the California-based venture firm Benchmark, have already received their funds from the acquisition. Asian investors such as Tencent, HSG, and ZhenFund have indicated their willingness to cooperate with the process of ending the acquisition.
Given Manus’ Chinese origins and its parent company, Butterfly Effect, it attracted scrutiny on both sides of the Pacific. U.S. Senator John Cornyn questioned whether American capital should be invested in a company with Chinese ties.
Meta and Manus did not respond to requests for comment sent outside regular business hours.
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Meta has started winding down its $2 billion acquisition of Manus, officially ending operational ties with this AI startup founded in China and ceasing all data sharing between the two companies. This action represents the most concrete progress to date in fulfilling a divestiture order issued by Beijing about two months ago due to concerns over national security.
According to Bloomberg, Meta has also cut Manus off from its internal systems, preventing its employees from using Manus’ tools for internal projects as the two entities move closer to a complete separation.
As reported by May, the co-founders of Manus have held preliminary talks about raising around $1 billion from external investors in an effort to reclaim the startup from Meta. Such a move could lead to the creation of a Chinese joint venture and eventually a listing on the Hong Kong stock market, which has seen an increase in AI company listings this year, including those from firms like MiniMax and Zhipu.
What was initially seen as a significant milestone for Chinese AI companies is now falling apart at an accelerated pace. This development highlights Beijing’s firm commitment to maintaining control over technologies considered strategically important, regardless of whether a company is incorporated overseas.
In addition to the forced divestiture, Chinese authorities have tightened travel restrictions on researchers and executives from private firms, requiring government approval before they can travel abroad. The country is also strengthening oversight of foreign investment, with reports suggesting that leading AI companies such as Moonshot AI, StepFun, and ByteDance will need government approval before accepting investment from the United States. These measures add another layer to Beijing’s broader efforts to regulate its AI sector.
Even as Meta works to sever ties with Manus, the agentic AI startup has continued to release new features, including integrations with Similarweb and Shopify.
Manus gained widespread attention after a viral demonstration of its agent technology, prompting the company to relocate its staff to Singapore in mid-2025 before Meta announced its $2 billion acquisition in December. Chinese regulators began to closely examine the deal earlier that year, raising concerns about potential violations of technology export controls and foreign investment regulations.
According to the WSJ, Manus’ investors, including the California-based venture firm Benchmark, have already received their funds from the acquisition. Asian investors such as Tencent, HSG, and ZhenFund have indicated their willingness to cooperate with the process of ending the acquisition.
Given Manus’ Chinese origins and its parent company, Butterfly Effect, it attracted scrutiny on both sides of the Pacific. U.S. Senator John Cornyn questioned whether American capital should be invested in a company with Chinese ties.
Meta and Manus did not respond to requests for comment sent outside regular business hours.
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