AINEWS
Meta is tearing up its $2B Manus deal. Now the founders want it back.
Manus, a Chinese founded AI startup that builds "agentic" software for taking multi step actions on a user's behalf, was bought by Meta in December 2025.
Manus, a Chinese founded AI startup that builds "agentic" software for taking multi step actions on a user's behalf, was bought by Meta in December 2025.
Meta has severed Manus, a Chinese-founded AI startup that builds "agentic" software for taking multi-step actions on a user's behalf, from its internal systems, the most concrete step yet toward unwinding the $2 billion deal Beijing ordered dismantled on national security grounds roughly two months ago (TechCrunch, citing Bloomberg). Now the Manus co-founders are in preliminary discussions to raise roughly $1 billion to reclaim the company from Meta, with their original backers, Tencent, Hillhouse's HSG, and ZhenFund, lining up a Chinese joint-venture structure and a possible Hong Kong listing as the eventual exit.
The breakup is more than a single acquisition gone wrong. It is the first real test of a new architecture for cross-border AI deal-making, one in which Chinese-origin companies that raised US capital through offshore acquisitions can be peeled back, recapitalized at home, and re-listed in Hong Kong under a structure the Chinese state is willing to tolerate.
Manus relocated most of its staff to Singapore in mid-2025, before Meta announced the December acquisition. The Singapore move was supposed to make the deal palatable to Beijing. It did not. Within weeks of closing, Chinese regulators opened a national security review, and roughly two months ago they issued a formal divestiture order, according to the TechCrunch report.
Meta's response, per Bloomberg as reported by TechCrunch, has been operational rather than legal. The company has halted data sharing between the two firms and prevented Manus from powering internal Meta projects. The California-based backers who sold their stakes into the December deal, including Benchmark, have already received their proceeds. The Asian backers who funded Manus before the acquisition, Tencent, Hillhouse's HSG, and ZhenFund, are now the parties whose exit is still in motion.
The Manus co-founders, meanwhile, are working on the other half of the story. Per May reports cited in the TechCrunch piece, they have held preliminary discussions to raise roughly $1 billion from outside investors to reclaim the company. The structure being explored is a Chinese joint venture that would house the new capital, with the original founders and Asian backers regaining control, and a Hong Kong listing as the eventual exit. Hong Kong has been the venue of choice for Chinese AI listings in 2026, with companies like MiniMax and Zhiphu already trading there, a fact that makes the Manus path a template rather than a one-off.
The mechanism matters because the pressure behind it is real and widening. Beijing is tightening outbound capital and travel rules for top Chinese AI firms. Moonshot AI, StepFun, and ByteDance now require government sign-off before accepting US investment. Chinese AI researchers and executives face expanded travel restrictions, including the right to exit the country. Under that pressure, agency is migrating to the founder-investor axis: founders who can reincorporate at home, and investors who can underwrite a Hong Kong listing, are the ones who can keep building.
The legitimate critique still has to be named. Beijing is asserting extraterritorial control over Chinese-origin AI regardless of where the company is incorporated or who owns it. The Manus case is not a market correction. It is a regulatory choice, and a precedent. Any Chinese founder pitching a US acquirer in 2026 is now pricing in the chance that the deal will be unwound before the integration is finished, and any US acquirer writing a check is pricing in the chance that two years of work and a nine-figure sum will be returned in a divestiture.
What to watch next is whether the Manus co-founders can actually close the $1 billion. The talks are preliminary, the structure is still being designed, and the Hong Kong listing remains a possible path, not a confirmed destination. If the founders pull it off, expect a half-dozen similar recapitalizations to follow. If they cannot, the unwind becomes a cautionary tale, and the next Chinese AI company that fields an offer from Menlo Park will think twice before signing.