Meta Platforms has begun to dismantle its $2 billion acquisition of agentic AI startup Manus, following an unprecedented order from Chinese regulators to reverse the deal. This move includes Meta completing an operational separation from Manus and halting data sharing between the two companies. Meta employees are now barred from using Manus tools for internal projects, and Manus staff have lost access to Meta's internal data systems since the beginning of June.
The Chinese government's demand, issued in April, marks the first publicly confirmed use of its foreign-investment security review mechanism to unwind a completed cross-border AI acquisition. Manus, which moved its headquarters from China to Singapore last year before Meta announced its acquisition in December, is now seeking to fund a buyback. Its three founders, Xiao Hong, Ji Yichao, and Zhang Tao, are exploring options to raise approximately $1 billion to acquire the company back at a valuation at least matching Meta's original $2 billion payment.
The unwinding has significant implications for global tech firms. Analysts like Matthias Hendrichs note that "Chinese-origin AI now carries a kind of reversibility risk that no clever deal structure can price out." Han Shen Lin of The Asia Group commented that Beijing is sending a message about the limits of "Singapore washing" for Chinese tech sectors, while also demonstrating to Washington that transparency in ownership structures can be effective. Tencent, an early investor in Manus, is in discussions to become the largest shareholder in the startup, aiming to keep Manus operating independently from Singapore and potentially listing in Hong Kong, a strategy favored by Beijing for its AI champions.
