Meta has all started dismantling its $2 billion acquisition of Manus, completing an operational separation from the Chinese-founded AI startup and stopping data sharing among the two corporations. This is the most specific step yet closer to complying with a divestiture order Beijing issued kind of 2-months ago on national security grounds.
Meta has reduce Manus off from its inner systems, Bloomberg reported, preventing personnel from the use of Manus tools for internal projects as the 2 corporations move towards a complete separation.
Meanwhile, as per May reports, the co-founders of Manus have held preliminary discussions about elevating approximately $1 billion from outside investors to reclaim the startup from Meta, a move that could pave the way for a Chinese joint venture structure and an ultimate listing in Hong Kong, a venue that has seen a rise in AI listings this year for Chinese AI startups like MiniMax and Zhipu.
What was meant to be a landmark exit for Chinese AI is rapidly revealing. The move underscores Beijing’s determination to keep control over strategically sensitive technology, despite that of a company’s offshore incorporation.
In addition to the forced divestiture, Chinese authorities have since extended travel restrictions to researchers and executives at private corporations, needing government approval before heading abroad. China is likewise strengthening its grip on foreign capital, with reports showing that top AI firms, which include Moonshot AI, StepFun, and ByteDance, will require government sign-off earlier than accepting U.S. investment, including any other layer to Beijing’s sweeping effort to control its AI sector.
Even as Meta moves to sever ties with Manus, the agentic AI startup has persisted to ship new features, rolling out incorporation with Similarweb and Shopify.
Manus, which went viral with a demo of its AI agent, relocated its staff to Singapore in mid-2025 earlier than saying a $2 billion acquisition through Meta in December. Chinese regulators moved to scrutinize the transaction earlier this year, mentioning potential violations of technology export controls and foreign investment rules.
Manus investors, together with California-based venture firm Benchmark, have already obtained their proceeds from the acquisition, even as Asian backers, together with Tencent, HSG, and ZhenFund, have showed they may cooperate with the unwinding technique, as per the Wall Street Journal.
Manus’ Chinese origins with parent company Butterfly Effect drew scrutiny on both sides of the Pacific, with Senator John Cornyn questioning whether American capital should flow to Chinese-linked corporation.
Meta and Manus did not instantly reply to a request for comment outside regular business hours.
