China Blocks Meta's $2 Billion Manus Acquisition, AI Startup to Resume Independent Operations

Zuck's Chinese agentic prey escapes, will resume standalone ops

China's decision not to allow Meta to acquire local AI outfit Manus AI has become reality, with the upstart advising users it will soon "return to operating as an independent company." Manus burst onto the AI scene in March 2025 with a "general agent" that allowed users assign tasks to an AI. To illustrate its powers, Manus claimed it could select the best candidate for a job by evaluating job applications stored in a .ZIP file, which it would open and read, then assess against user-defined criteria, before writing a document that ranked the best applications. All that work happened inside a virtual PC that Manus's agents drove without human help to do the job. The service quickly gathered many enthusiastic users and claimed to have hit a $100 million run rate. AI companies always need stacks of cash to buy and run more GPUs. To find it, Manus moved its official headquarters from China to investor-friendly Singapore. In December 2025, Meta founder and CEO Mark Zuckerberg decided to acquire Manus and said he planned to use its tech across The Social Network's AI products. "Manus's exceptional talent will join Meta's team to deliver general-purpose agents across our consumer and business products, including in Meta AI," according to Meta's acquisition announcement. Beijing had other ideas and in early 2026 launched an investigation into the acquisition. By April, Chinese regulators had decided to forbid foreign investment in Manus. Meta decided not to fight China over the matter and started disentangling itself from Manus. That effort seems near complete because on Tuesday Manus published a note to its users that opens "Manus will soon return to operating as an independent company." The separation from Meta won't be painless because Manus says legal matters mean it must delete some user data generated since December 29, 2025. The company will hit type rm -rf on August 24. Customers who download their data before then can restore it to Manus from August 25. Meta hasn't said how or if it will replace Manus's tech, or if it learned enough during its brief time working with the Chinese company to get what it needed to build the superintelligence Zuck this week promised to bring us all. The whole incident now serves as an example of China's determination to keep control of local innovators, rather than let them leave the country in search of foreign investment. Yet at the same time, China is using open-weight models to challenge American model-makers. ®

Manus to return as independent company after China forced Meta to unwind $2 billion deal

Manus said Tuesday it will "soon resume operating as an independent company," after Chinese regulators in April demanded Meta unwind its $2 billion acquisition of the artificial intelligence startup. Last December, Meta announced it acquired Manus, a developer of general purpose AI agents that was founded in China in 2022 before relocating to Singapore. The deal quickly attracted scrutiny from Beijing and Washington, with Chinese officials investigating whether it violated the country's rules on foreign investment. The country's National Development and Reform Commission issued its decision in April, instructing the parties to withdraw the transaction. That kickstarted a complicated unwinding process. Beijing has since tightened tech export controls on cross-border deals, as the U.S. and China compete for talent, hardware and data amid an intensifying AI race. Manus said Tuesday that some users will need to back up their data generated on or after December 29, 2025, the date the Meta deal was announced. "This is part of our separation from Meta; we must take this step to comply with regulatory requirements in specific parts of the world," the company wrote. Meta had planned to implement Manus' technology in its consumer and enterprise products. The deal came amid a string of aggressive AI expansion by Meta, which has been working to build a subscription business around the technology and compete with Google and top AI labs Anthropic and OpenAI. Last week, Meta released its first coding agent, marking its latest attempt to generate revenue from AI.

Manus returns to independence after China blocks Meta acquisition

Chinese regulators ordered Meta to reverse its December acquisition of the AI agent startup, triggering a data deletion process for some users Manus announced Tuesday that it will resume operating as an independent company, as it works to comply with Beijing's order to reverse Meta $META's $2 billion acquisition of the startup. Manus is an AI agent startup that originated in China in 2022 and later moved its base to Singapore, according to CNBC. Meta announced the acquisition of Manus in December 2025. China's National Development and Reform Commission issued a directive in April ordering the parties to unwind the transaction, citing the country's rules on foreign investment. As part of the separation, some Manus users will have data deleted. Specifically, for users in certain jurisdictions, any data created from December 29, 2025 onward -- the day the acquisition closed -- is slated for removal. "This is part of our separation from Meta; we must take this step to comply with regulatory requirements in specific parts of the world," the company said. Affected users have a backup window open through 7:59 p.m. EDT on August 22. Data will be deleted August 23 through August 24, and users will be able to restore their backed-up data starting August 25. Manus said it will not charge affected users during the backup period. The unwinding process has been underway for months. Meta cut off Manus staff from its internal data systems and barred Meta employees from using Manus tools, in steps toward operational separation. China's NDRC order made clear that offshore incorporation does not shield a deal from Beijing's authority when the underlying technology and talent originated in China -- a structure critics had called "Singapore washing." Co-founders Xiao Hong and Ji Yichao were required to appear before Chinese officials in Beijing in March and have since been prohibited from traveling abroad. The financial mechanics of the reversal have been complex. Manus co-founders Xiao Hong, Ji Yichao, and Zhang Tao explored raising roughly $1 billion from outside investors to fund a buyback at a valuation matching the $2 billion Meta paid, with a potential Hong Kong IPO as a longer-term outcome. Those discussions were described as early-stage, with no firm decisions made. Tencent, the Chinese gaming and internet giant, is in discussions that could give it a controlling stake in Manus, according to Reuters. According to CNBC, Meta's strategy had been to integrate Manus capabilities across its consumer and enterprise offerings as it works to monetize AI through a subscription model.

AI firm Manus to resume 'independent' operations after China blocks Meta deal

Beijing (AFP) - AI startup Manus said Tuesday it would resume "operating as an independent company," months after Beijing blocked Meta's multi-billion-dollar acquisition of the Chinese-developed, Singapore-based company. Some data going back to late December will be deleted as a result, and Manus urged users impacted by the change to back up their data. "This is part of our separation from Meta; we must take this step to comply with regulatory requirements in specific parts of the world," Manus said in a blog post. Meta agreed to acquire Manus, an artificial intelligence (AI) agent developed by the startup Butterfly Effect, in a deal reportedly worth around $2 billion. AI agents are software programs that are designed to perform tasks without human intervention. Meta pursued a deal with Manus to "bring a leading agent to billions of people and unlock opportunities for businesses across our products, the social media giant said in December when it announced the deal. However, China's top economic planning body blocked the deal in April and ordered them to "withdraw the acquisition." At the same time, Beijing also reportedly restricted travel for two of Manus' co-founders, preventing them from leaving China. Meta previously told AFP in a statement that "the transaction complied fully with applicable law". China has been cracking down on a practice known as "Singapore-washing," which is when companies leave the country to take advantage of looser regulations, global customers or funding opportunities. Beijing "tolerated" it for a while, but "the Manus case marks a major turning point" as the US-China AI race heats up, Wendy Chang at the Mercator Institute for China Studies told AFP in April. The crackdown is a signal "to its own tech leaders, more than to anybody else, that attempts to bypass national regulation will not be tolerated," Chang continued. Many of Manus' former investors are in discussions to retake stakes in the startup at a $2 billion valuation, including Tencent which would become its largest shareholder, the FT reported. Meta Manifesto In the United States, the unwinding of the Manus deal may be a temporary setback for Meta, which is racing to strengthen its position in AI. In a long essay published Monday about the future of artificial intelligence, Meta Chief Executive Mark Zuckerberg called for the United States to compete against China, prevent "government tyranny" over AI and ensure that "superintelligence" technology will become available to everyone. Superintelligence is a theoretical point when AI's capabilities exceed human intelligence. On Monday, Meta also announced a new model called Glimmer, which it developed in part from Muse Spark, a closed-source model it announced in April and updated last week. Glimmer is an open weight model, meaning users can download and modify the underlying rules that govern the AI system. "Rather than centralizing superintelligence, we should distribute it widely and give every person the ability to direct it," Zuckerberg wrote, arguing that open models are a key part of a global AI ecosystem. Competitors like OpenAI and Anthropic largely focus on closed AI models, which are considered black boxes that users cannot inspect themselves. Leading AI developers have met with the Trump administration in recent months, including OpenAI, Anthropic, Google, Nvidia, Microsoft and Meta, according to reports. In June, President Donald Trump signed an executive order that called for major AI developers to submit new models to the government for review 30 days before they are publicly released. It also gave the federal government a 60-day deadline to finalize a proposed framework. Open models will reportedly be exempt from the new voluntary review process. That deadline passed on August 1 without any public announcement.

Manus splits from Meta after China orders reversal of $2bn deal

The acquisition faced near immediate scrutiny from Chinese authorities. AI start-up Manus is going back to being an independent business after Meta's $2bn-plus acquisition of the company was ordered to be unwound by Chinese authorities over national security concerns. "We must take this step to comply with regulatory requirements in specific parts of the world," Manus said in a blog post yesterday (11 August). As part of these changes, it said that some of its users may lose the data they generated using Manus' AI. "As we look to the future, we're already preparing a series of new features that will push the boundaries of what's possible for general AI agents once again." Meta acquired the Singapore-headquartered Manus (developed by China's Butterfly Effect) late last December as part of its continued push into agentic AI. The acquisition faced near immediate scrutiny from Chinese authorities, who launched a probe shortly following the deal's announcement. Meta said that the deal "complied fully with applicable law". "Manus has built one of the leading autonomous general-purpose agents that can independently execute complex tasks like market research, coding and data analysis," the Facebook parent said at the time its purchase. Its general purpose AI agent, previewed last year, offered users capabilities similar to those of the likes of OpenAI's Deep Research. In February, Manus launched personal agents in messaging apps, allowing users to conduct research, structure data and make requests entirely through chat. It launched the agents on Telegram despite being owned by Meta at the time, but said that it planned to expand into WhatsApp, Line, Slack and Discord "very soon". The deal was formally struck down by China's National Development and Reform Commission in April, which said that the acquisition was not in accordance with State laws. The country is increasingly protective of its AI technology and talent, and has been making concerted efforts to build out its own infrastructure to back the technology. Reversing the acquisition was difficult for Meta, which had reportedly already integrated Manus employees, executives and technology into its own. Investors, including Tencent Holdings, ZhenFund and Hongshan, had also received their proceeds from the acquisition by the time the two companies proceeded to break up. Tencent is now reportedly set to become Manus' largest external shareholder. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

Caught between great powers: the cautionary tale of Manus

Beijing (AFP) - Once the envy of China's tech scene, the startup behind the artificial intelligence agent tool Manus has become an example of how rivalry between global powers can ensnare young entrepreneurs' ambitions. In April, China blocked the acquisition of Manus, an AI-powered app that can carry out tasks for users, by Facebook owner Meta after a regulatory review. As Manus confirmed its separation from Meta on Tuesday, AFP looks at the rise and fall of its Meta deal: 2022-25: Early excitement Buzz grew quickly around the AI startup Butterfly Effect, founded in Beijing in 2022. Manus, its AI agent tool, generated massive interest ahead of its official launch in March 2025. More than 3.5 million people applied for invitation codes for early access, with some codes fetching thousands of dollars on online resale markets. At its launch, Chinese state media hailed Manus as a symbol of national innovation. Mid-2025: Shift to Singapore Soon after the Manus launch, in May 2025, US investors Benchmark Capital led a $75 million funding round in Butterfly Effect, valuing it at nearly half a billion dollars. The startup was seemingly on track to achieving CEO Xiao Hong's ambition of creating a Chinese company with worldwide recognition. In a world free of geopolitics, "the Manus story would be a simple story of an incredible AI startup getting rewarded with a big exit", Kyle Chan from the Brookings Institution told AFP. Manus' trajectory shifted abruptly in mid-2025, when the firm laid off dozens of staff in Beijing and Wuhan and relocated core personnel to Singapore. It also began blocking access for Chinese users, and withdrew its presence on Chinese social media. 2025-26: 'Singapore-washed?' Moving to Singapore -- a playbook sometimes dubbed "Singapore-washing" -- can help Chinese startups tap international capital and overseas users, supposedly at a distance from Beijing's legal and political reach. One source with knowledge of the company told AFP that Butterfly Effect's move was driven primarily by an unexpected US investigation into Benchmark Capital. The probe fell under Washington's 2025 Outbound Investment Security Program, which restricts investment in Chinese companies in sectors such as AI, semiconductors and quantum computing. The source said Butterfly Effect had initially planned to move only a small US-facing team to Singapore, but chose to relocate all operations there instead. AFP contacted the company for comment, but did not receive a response. Dec 2025: Meta deal As 2025 drew to a close, US tech giant Meta announced that the team behind Manus would join its AI division after the completion of a buyout worth a reported $2 billion. It was the third largest acquisition deal in Meta's history, following WhatsApp and Scale AI. "We're excited about what the future holds," CEO Xiao said at the time. However, trouble was brewing. "Beijing wants its top tech startups to list in Hong Kong and Shanghai, not fire their Chinese staff and relocate to Singapore... (and) sell out to an American company," sell out to an American company," said Brookings' Chan. Reports in March 2026 said the Chinese government was reviewing the Meta buyout, and had restricted two Singapore-based Manus co-founders from leaving China. April 2026: China block China's top economic planning body decreed in a statement in April that it would "prohibit the foreign investment" in the Manus deal and "requires the parties involved to withdraw the acquisition transaction". The ruling against Manus -- operating from Singapore with Butterfly Effect still registered as a company in China -- was made under measures in place since 2021 to review foreign investments for national security concerns. In Beijing's view, a Chinese-grown startup handing over talent and tech assets to a US giant would have "set a bad precedent", AI industry analyst Max Liu said. Sherlock Xia of law firm Yenlex said that China's move had sent a "clear signal" that attempting to shed Chinese identity through overseas relocation was no longer viable. August 2026: Manus confirms separation The Wall Street Journal had previously reported that Meta was preparing to backtrack on the deal, a complicated U-turn given that investors had already received returns. Bloomberg News said in June that Meta had cut Manus off from its internal systems as the divorce progressed. Manus announced on Tuesday that it would "soon return to operating as an independent company". "This is part of our separation from Meta; we must take this step to comply with regulatory requirements in specific parts of the world," the firm said in a statement posted to its website.

AI startup Manus to resume independent operations as deal with Meta unwinds

AI startup Manus said on Tuesday it will resume operating as an independent company and some user data will be deleted as part of its separation ⁠from ⁠U.S. tech giant Meta. "As part of our transition back to independent operations and to comply with regulatory requirements in specific jurisdictions, data generated by certain users on/after December 29, ⁠2025" will be deleted later this month, Manus said in a statement. ⁠Affected users will be notified through the Manus app and by email and will be able to back up their data, the company said. "This is part of our separation from Meta," it said. In April, Beijing ordered Meta to unwind its $2 billion-plus acquisition of Manus, as ⁠China tightened scrutiny of U.S. investment in Chinese startups developing frontier technologies. Chinese gaming and internet company Tencent has been in talks to become Manus' largest shareholder, Reuters reported in July.