Meta's $2 Billion Manus Deal Faces Beijing-Driven Reversal

Meta Platforms is considering a rare reversal of its $2 billion acquisition of Manus, a Chinese-founded AI startup, after Beijing pressured the company to unwind the deal. Manus co-founders Xiao Hong, Ji Yichao, and Zhang Tao are discussing a $1 billion funding round from outside investors to repurchase the AI operation, potentially valuing Manus at or above Meta’s original purchase price. The proposed buyout could involve Manus setting up a China-based joint venture with new backers ahead of a potential Hong Kong IPO, allowing the company to maintain U.S. dollar funding while aligning with Beijing’s regulatory demands. This follows Manus relocating its headquarters and key staff to Singapore in 2025 before Meta announced the acquisition in December, a move that has intensified scrutiny over technology transfers and geopolitical risks. Investors are assessing whether Meta can practically unwind the deal, given that Manus employees have joined Meta, capital has been transferred, and the startup’s AI technology has been integrated into Meta’s systems. Manus was projected to generate about $1 billion in revenue this year, which has drawn interest in a repurchase, though discussions remain preliminary and the valuation could still change. The situation highlights broader challenges in cross-border AI transactions, where regulatory pressure, corporate structure, and technology control may reshape how future deals are priced. Beijing’s push to prevent sensitive AI talent and technology from leaving the country adds complexity to the reversal process, marking a significant test case for global tech investments.