Meta starts unwinding $2B Manus AI deal after Beijing order
What's the story
Meta has started the process of unwinding its $2 billion acquisition of AI start-up Manus. The move comes after a divestiture order from Beijing on national security grounds. The operational separation between the two companies is now complete, and data sharing has been halted. According to Bloomberg, Meta has cut off Manus from its internal systems, preventing employees from using Manus tools for internal projects as they work toward a full separation.
Buyback discussions
Co-founders in talks to raise $1 billion
The co-founders of Manus are said to be in early talks to raise about $1 billion from outside investors. The funds would help them buy back the start-up from Meta, paving the way for a possible Chinese joint venture structure and an eventual listing in Hong Kong. This comes as Beijing tightens its grip on foreign capital, with top AI firms needing government approval before accepting US investment.
Tech control
Beijing's determination to control technology
The unraveling of the Manus deal highlights Beijing's determination to control strategically sensitive technology, no matter where a company is incorporated. Along with the forced divestiture, Chinese authorities have also expanded travel restrictions for researchers and executives at private firms. They now need government approval before traveling abroad, further tightening China's grip on foreign capital and its AI sector.
Operational continuity
Despite separation, Manus continues to launch new features
Despite the ongoing separation process, Manus has continued to launch new features and integrations with Similarweb and Shopify. The start-up gained massive attention with a viral agent demo and moved its staff to Singapore in mid-2025. Chinese regulators began scrutinizing the deal earlier this year over possible technology export control violations and foreign investment regulations.
Investor response
Investors have received proceeds from the acquisition
Investors in Manus, including California-based venture firm Benchmark, have already received their proceeds from the acquisition. Asian backers such as Tencent, HSG, and ZhenFund have also indicated they will cooperate with the unwinding process. The scrutiny over Manus's Chinese origins with parent company Butterfly Effect has drawn questions from both sides of the Pacific about American capital flowing into a Chinese-linked firm.