Meta reportedly moves to unwind $2B Manus deal after Beijing’s demand

Meta has begun unwinding its $2 billion acquisition of Manus, a Chinese-founded AI startup, after Beijing demanded divestiture citing national security concerns. The company has cut Manus off from its internal systems, halting data sharing and preventing employees from using Manus tools for internal projects. This follows a divestiture order issued by Chinese authorities roughly two months ago, marking the most concrete step toward compliance. Manus co-founders are in preliminary talks to raise approximately $1 billion from outside investors to reclaim control from Meta. The funding could enable a Chinese joint venture structure and an eventual listing in Hong Kong, aligning with recent trends among Chinese AI firms like MiniMax and Zhipu. Meanwhile, Chinese regulators have expanded travel restrictions for AI researchers and executives, requiring government approval for international travel, and tightened controls on foreign capital in tech companies. Meta’s acquisition of Manus drew scrutiny from U.S. lawmakers, including Senator John Cornyn, who questioned American investment in a Chinese-linked firm. The deal initially involved investors like Benchmark, Tencent, HSG, and ZhenFund, with Asian backers now cooperating with the unwinding process. Manus continues to develop new features, including integrations with Similarweb and Shopify, despite the operational separation. The forced divestiture underscores Beijing’s push to retain control over strategically sensitive AI technology. Reports indicate China is also requiring government sign-off before U.S. investment in top AI firms like Moonshot AI, StepFun, and ByteDance. The situation reflects broader tensions over AI development and foreign investment in China’s tech sector.