Meta has begun dismantling its $2 billion acquisition of Manus, cutting the Chinese-founded AI startup off from internal systems and halting data sharing between the two companies. That's the most concrete step yet toward complying with a divestiture order Beijing issued roughly two months ago on national security grounds.
The Deal That Was Supposed to Be a Landmark Exit
Announced in December 2025, the acquisition was meant to be a landmark exit for Chinese AI—Manus, an agentic AI startup headquartered in Singapore after relocating from China, drew a viral demo and caught Meta's attention. But Chinese regulators scrutinized the transaction earlier this year, citing potential violations of technology export controls and foreign investment rules. Now Meta has cut Manus off from its internal systems, preventing employees from using Manus tools for internal projects, per Bloomberg.
Co-Founders Eye a $1 Billion Buyback
According to May reports, Manus co-founders have held preliminary discussions about raising roughly $1 billion from outside investors to reclaim the startup from Meta. That could pave the way for a Chinese joint venture structure and an eventual listing in Hong Kong, a venue that has seen a surge in AI listings from Chinese startups like MiniMax and Zhipu this year. Manus investors—California-based Benchmark has already received its acquisition proceeds, while Asian backers including Tencent, HSG, and ZhenFund have indicated they will cooperate with the unwinding process, according to the WSJ.
Beijing's Broader Grip on AI Capital and Movement
Beijing's demand doesn't stop at Manus. Chinese authorities have expanded travel restrictions to researchers and executives at private firms, requiring government approval before heading abroad. Top AI firms including Moonshot AI, StepFun, and ByteDance now need government sign-off before accepting U.S. investment. Even as Meta severs ties, Manus has continued shipping new features—rollouts include integrations with Similarweb and Shopify.
What Comes Next
This unraveling underscores Beijing's determination to retain control over strategically sensitive technology, regardless of a company's offshore incorporation. With a Hong Kong listing on the table and a $1 billion fundraising round in the works, Manus may yet survive as an independent Chinese AI player—but the era of frictionless cross-border AI deals is clearly over.
Source: Meta reportedly moves to unwind $2B Manus deal after Beijing's demand
Domain: techcrunch.com
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