Meta has begun unwinding its $2 billion acquisition of Manus, completed an operational spin-off from the China-based artificial intelligence startup and halted data sharing between the two companies. This is the most concrete step taken to comply with the order issued by Beijing about two months ago on the grounds of national security.
Cut off Meta Manus from their internal systems, Bloomberg reported on this. preventing employees from using Manus tools for internal projects as the two companies move toward a full separation.
Meanwhile, according to May reportsManus’ co-founders have been in early talks to raise about $1 billion from outside investors to buy the startup back from Meta, which could pave the way for a Chinese joint venture structure and eventual Hong Kong listing. MiniMax and Zhipu.
What should have been a landmark performance by Chinese AI quickly unravels. The move underscores Beijing’s determination to retain control over the strategically sensitive technology, regardless of the company’s offshore incorporation.
In addition to the forced deal, Chinese authorities have since extended travel restrictions to researchers and executives of private firms who require government approval before going abroad. It is China it also strengthens control over foreign capitalAdding another layer to Beijing’s far-reaching efforts to control the AI sector, with reports indicating that top AI firms including Moonshot AI, StepFun and ByteDance will need government sign-off before accepting US investment.
Even as Meta moved to cut ties with Manus, the agent AI startup continued to ship new features and roll out integrations. Similar web and Shopify.
Before Manus announced a $2 billion buyout by Meta in December, it gained widespread attention with a viral agent demonstration of relocating its employees to Singapore in mid-2025. Chinese regulators moved to scrutinize the operation earlier this year, citing potential violations of technology export controls and foreign investment rules.
Manus investors, including California-based venture capital firm Benchmark, have already received proceeds from the acquisition, while backers from Asia, including Tencent, HSG and ZhenFund, have said they will cooperate with the transaction. WSJ.
Manus’s Chinese background with its parent company, Butterfly Effect, caught the senator’s attention on both sides of the Pacific. John Cornyn questioning Whether American capital should flow to a Chinese-linked firm.
Meta and Manus did not immediately respond to a request for comment outside regular business hours.
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