Meta reportedly moves to unwind $2B Manus deal after Beijing’s demand

Meta is taking significant steps to reverse its $2 billion acquisition of Manus, a Chinese-founded AI startup, following a national security directive from Beijing. Reports indicate that Meta has implemented an operational separation from Manus and has ceased all data sharing between the two entities. This action represents a crucial move towards complying with the divestiture order issued by Chinese authorities approximately two months ago. In a bid to ensure a clean break, Meta has restricted Manus's access to its internal systems, effectively preventing its employees from utilizing Manus's tools in any internal projects. As negotiations unfold, co-founders of Manus are reportedly exploring options to raise around $1 billion from external investors. This funding could facilitate a new structure for the startup, potentially leading to a joint venture in China and an eventual public offering in Hong Kong, a market that has recently seen a spike in AI listings. This unraveling of the acquisition highlights Beijing's intention to maintain a firm grip on sensitive technologies, irrespective of the company's overseas status. In tandem with the divestiture, Chinese authorities are also tightening travel regulations for researchers and executives at private firms, requiring them to obtain government approval for international travel. Furthermore, the Chinese government is imposing stricter controls over foreign investments, mandating that leading AI companies, such as Moonshot AI and ByteDance, secure government authorization before accepting any U.S. investments. Despite the dissolution of its ties with Meta, Manus continues to innovate, recently launching new features and integrations with platforms like Similarweb and Shopify. The startup gained substantial attention for its viral agent demonstrations and had relocated its staff to Singapore in mid-2025 prior to Meta's acquisition announcement in December. However, Chinese regulators have raised concerns about potential breaches of technology export controls and investment regulations, prompting a closer examination of the deal. Investors in Manus, including the California-based venture firm Benchmark, have reportedly received their payouts from the acquisition, while Asian investors such as Tencent and ZhenFund are cooperating with the unwinding process. The scrutiny surrounding Manus, particularly given its ties to the parent company Butterfly Effect, has led to questions in the U.S. Congress about the implications of American investments in Chinese-linked firms. Both Meta and Manus have not provided comments outside of regular business hours.