AI agent startup Manus announced on August 11 that it will resume operating as an independent company, completing the unwinding of Meta's $2 billion acquisition after Chinese regulators ordered the deal reversed1,11.
Meta announced the acquisition of Manus in December 2025, with the deal closing on December 29, 20258. Manus, a developer of general-purpose AI agents founded in China in 2022 by entrepreneur Xiao Hong, had relocated to Singapore before the acquisition4. The company had released its first agent product in March 2025 through its parent company, Butterfly Effect. Reports from Reuters, The Business Times, and The Information valued the deal at more than $2 billion.
The acquisition drew scrutiny from both Beijing and Washington, with Chinese officials investigating whether it violated the country's rules on foreign investment. According to Reuters, citing the Financial Times, Manus CEO Xiao Hong and chief scientist Ji Yichao were summoned to Beijing in March and barred from leaving China while regulators reviewed the sale. China's National Development and Reform Commission issued its decision in April, instructing the parties to withdraw the transaction10. The NDRC's foreign investment security review office said it would prohibit foreign investment in Manus and require the parties to unwind the deal.
By June, Meta had begun dismantling the acquisition, cutting Manus off from internal systems and halting data sharing between the two companies. Manus shut its China offices in July and laid off dozens of employees.
As part of the separation, Manus said data generated by certain users on or after December 29, 2025, will be deleted between 8:00 a.m. on August 23 and August 24, 2026, Singapore time, to comply with regulatory requirements in certain jurisdictions2. Affected users can back up their data until 7:59 a.m. on August 23 and restore it from 8:00 a.m. on August 25. Users who are not affected can continue using Manus without taking any action. Affected users will be notified via the Manus app and by email, though users who registered with an Apple Account or Facebook account will only receive notifications via the app, as Manus does not have access to their email addresses.
Manus said it will continue serving millions of users worldwide. The Business Times reported that Manus said it had a revenue run rate above $125 million.
The company's next chapter may involve new backers. Reports from Reuters and Asia Business Daily, citing the Financial Times, indicate Tencent is in talks to become Manus's largest shareholder as part of a buyback at roughly the same $2 billion valuation. Tencent would hold less than 50% of Manus under the reported arrangement, and Manus would continue operating from Singapore rather than being folded into Tencent.
Manus had raised a $75 million round led by U.S. venture firm Benchmark in May 2025. Meta had planned to integrate Manus's technology into its consumer and enterprise products.
ANALYSIS The forced unwinding establishes that Beijing treats Chinese-origin AI companies as subject to its jurisdiction regardless of subsequent reincorporation abroad — a factor that any acquirer of a China-founded AI startup will now need to weigh. The reported Tencent discussions suggest Manus's operational continuity depends on securing a new anchor investor acceptable to Chinese regulators, while maintaining its Singapore base.