Meta Allegedly Seeks to Terminate $2B Manus Agreement Following Requests from Beijing
Meta has initiated the process of unwinding its $2 billion acquisition of Manus, finalizing an operational split from the AI startup founded in China and ceasing data exchanges between the two entities. This marks the most significant measure taken to adhere to a divestiture demand from Beijing issued about two months ago, citing national security concerns.
According to reports, Meta has disconnected Manus from its internal networks, making it impossible for employees to utilize Manus tools for internal initiatives as both organizations work towards a complete separation.
In parallel, reports from May indicated that the co-founders of Manus have started initial talks to secure around $1 billion from external investors to buy back the startup from Meta. This strategy could facilitate a structure for a Chinese joint venture and potentially lead to a listing in Hong Kong, which has experienced a spike in AI listings this year for startups like MiniMax and Zhipu.
What was once anticipated as a significant advancement for Chinese AI is rapidly deteriorating. This situation highlights Beijing’s resolve to maintain oversight over critical technologies, irrespective of a company’s registration abroad.
Alongside the enforced divestiture, Chinese authorities have intensified travel restrictions for researchers and executives at private companies, now requiring official approval for international trips. Additionally, China is tightening its regulations on foreign investments, with reports suggesting that leading AI firms such as Moonshot AI, StepFun, and ByteDance must obtain governmental consent before accepting investments from the U.S., furthering Beijing’s comprehensive strategy to control its AI industry.
Despite Meta’s efforts to cut ties with Manus, the AI startup continues to release new features, including integrations with Similarweb and Shopify.
Manus gained significant attention with a viral agent demonstration and moved its operations to Singapore in mid-2025 before announcing its $2 billion acquisition by Meta in December. Chinese regulators began to investigate the deal earlier this year, pointing to possible breaches of technology export controls and foreign investment regulations.
Investors in Manus, including California’s Benchmark venture firm, have already received their gains from the acquisition, while Asian investors like Tencent, HSG, and ZhenFund have expressed their intention to assist with the separation process.
The Chinese roots of Manus, connected to its parent company, Butterfly Effect, have raised concerns on both sides of the Pacific, prompting Senator John Cornyn to question the appropriateness of American investments flowing into a Chinese-linked enterprise.
Meta and Manus have not provided immediate comments outside of regular business hours.
