Meta has initiated the dismantling of its $2 billion acquisition of Manus, marking a significant operational separation from the Chinese-founded artificial intelligence startup and ceasing all data sharing between the two entities. This action represents the most definitive step taken to date in compliance with a divestiture order issued by Beijing approximately two months prior, citing national security concerns.
As part of this ongoing transition towards a complete separation, Meta has severed Manus's access to its internal systems, as reported by Bloomberg. This measure effectively prevents Meta employees from utilizing Manus's tools for internal projects.
Concurrently, reports from May indicate that Manus's co-founders have engaged in preliminary discussions aimed at securing around $1 billion from external investors. This fundraising effort seeks to reclaim the startup from Meta, potentially paving the way for a new Chinese joint venture structure and an eventual listing on the Hong Kong Stock Exchange. Hong Kong has recently emerged as a favored destination for Chinese AI startups seeking public listings, exemplified by companies like MiniMax and Zhiphu.
What was initially envisioned as a landmark exit for Chinese AI technology is now rapidly unraveling. This development underscores Beijing's firm resolve to maintain stringent control over strategically sensitive technologies, irrespective of a company's offshore incorporation.
Beyond the forced divestiture, Chinese authorities have also broadened travel restrictions for researchers and executives at private firms, necessitating government approval for any international travel. Furthermore, China is intensifying its oversight of foreign capital; reports suggest that leading AI companies, including Moonshot AI, StepFun, and ByteDance, will require government endorsement before accepting U.S. investments. These measures collectively illustrate Beijing's expansive strategy to assert greater control over its domestic AI sector.
Despite Meta's efforts to sever ties, Manus, an agentic AI startup, has continued its product development, rolling out new features and integrations with platforms such as Similarweb and Shopify.
Manus initially garnered widespread attention following a viral agent demonstration. The company subsequently relocated its staff to Singapore in mid-last year before Meta announced its $2 billion acquisition in December. Earlier this year, Chinese regulators began scrutinizing the transaction, citing potential breaches of technology export controls and foreign investment regulations.
According to the Wall Street Journal, Manus investors, including California-based venture firm Benchmark, have already received their proceeds from the acquisition. Asian backers, such as Tencent, HSG, and ZhenFund, have indicated their willingness to cooperate with the unwinding process.
Manus's Chinese origins, stemming from its parent company Butterfly Effect, attracted scrutiny across both the Pacific. Senator John Cornyn, for instance, publicly questioned the appropriateness of American capital flowing to a firm with such Chinese ties.
Meta and Manus did not immediately respond to requests for comment outside of regular business hours.
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