Meta has initiated the dismantling of its $2 billion acquisition of Manus, marking a significant step towards complying with a divestiture order issued by Beijing roughly two months ago due to national security concerns.
Operational Separation Underway
According to Bloomberg, Meta has cut off Manus from its internal systems, barring employees from using Manus tools for internal projects as they progress towards a complete separation.
Manus Co-founders Seek New Investment
The co-founders of Manus are reportedly in preliminary talks to raise about $1 billion from external investors. This move aims to reclaim the startup from Meta and may lead to a Chinese joint venture structure and a potential listing in Hong Kong. The region has experienced a surge in AI listings this year for companies like MiniMax and Zhipu.
Beijing Tightens Control Over AI Sector
Beijing's actions highlight a determination to maintain control over strategically sensitive technology. The authorities have expanded travel restrictions for researchers and executives at private firms, requiring government approval for international travel. Additionally, Chinese authorities are tightening control over foreign capital, with top AI firms like Moonshot AI, StepFun, and ByteDance needing government approval before accepting U.S. investment.
Continued Developments at Manus
Despite the separation, Manus continues to develop new features, recently launching integrations with Similarweb and Shopify. The company gained attention with a viral agent demo and relocated its staff to Singapore in mid-2025, ahead of Meta's $2 billion acquisition announcement in December. Chinese regulators began scrutinizing the transaction earlier this year, citing potential violations of technology export controls and foreign investment rules.
Investors, including California-based venture firm Benchmark, have received their acquisition proceeds. Asian backers such as Tencent, HSG, and ZhenFund have signaled cooperation with the unwinding process, as reported by the Wall Street Journal.
Manus' Chinese origins, with parent company Butterfly Effect, attracted scrutiny. Senator John Cornyn questioned whether American capital should support a Chinese-linked firm. Meta and Manus have not commented on the situation outside regular business hours.
Source: https://techcrunch.com/2026/06/13/meta-reportedly-moves-to-unwind-2b-manus-deal-after-beijings-demand/
