Meta disconnects Manus from data systems and starts reversing the agreement.

      **TL;DR** Meta has disconnected Manus from its internal systems and instructed employees to phase out the platform. The $2 billion acquisition is being reversed following a directive from Beijing to unwind it in April, while Manus's founders seek to raise $1 billion for a buyback.

      Meta has set up a data barrier that separates it from Manus, the agentic AI service it purchased for $2 billion in December 2025. Since early June, Manus and its team have been restricted from accessing Meta’s internal data systems, and Meta staff can no longer utilize Manus tools for their projects, as reported by Bloomberg. An internal memo seen by Bloomberg directed employees to transfer any existing Manus projects onto Meta’s systems and to refrain from initiating new projects on the platform. The memo indicated that Meta is in the process of "sunsetting" Manus.

      **Reason for Unwinding the Deal**

      In April 2026, China’s National Development and Reform Commission ordered the dismantling of the deal after a four-month regulatory investigation that began shortly after the acquisition was made public. The NDRC determined that the agreement infringed upon foreign investment and technology export laws, even though Manus had moved its headquarters and key personnel from China to Singapore in 2025. The investigation intensified in March when Chinese officials barred co-founders Xiao Hong and Ji Yichao from leaving the country and summoned them for questioning in Beijing. This intervention signaled to Chinese AI entrepreneurs that establishing in Singapore does not exempt them from Beijing's oversight.

      **The Buyback Strategy**

      Manus’s founders, Xiao Hong, Ji Yichao, and Zhang Tao, are considering avenues to secure around $1 billion from external investors to facilitate a buyback that aligns with the $2 billion valuation Meta agreed to. The founders might also invest their own capital to cover any remaining amount, as reported by Bloomberg last month. If the buyback is successful, the next move would be to establish Manus as a Chinese joint venture with these backers, potentially leading to an IPO in Hong Kong. It remains uncertain whether discussions around fundraising have progressed significantly.

      **What Remains Connected**

      Despite the operational disconnect, Manus continues to develop its features. It has integrated data from Similarweb, introduced e-commerce capabilities from Shopify, and as of this week, still allows users to connect to Meta’s Ads Manager, Instagram, Gmail, and GitHub. Manus employees have relocated to Meta’s Singapore offices. Investors such as Tencent, ZhenFund, and HSG have already received payments from the acquisition, complicating any efforts to completely undo the deal.

      **From Viral Success to Cautionary Example**

      Launched in invitation-only beta in March 2025, Manus debuted with a demo that garnered over a million views in just 20 hours, showcasing an autonomous AI agent capable of web browsing, coding, file management, and performing multi-step tasks independently. It was celebrated as China’s second “DeepSeek moment,” signaling a potential challenge to Silicon Valley’s supremacy in agentic AI. The trajectory, from viral success to $2 billion exit to regulatory dissolution, occurred in less than a year. China has since enacted stricter outbound investment regulations, affording regulators greater authority to block international AI transactions involving Chinese technology, talent, or intellectual property, regardless of the company's incorporation location.

      **The Challenges Ahead**

      The operational separation is a move towards unwinding the acquisition, but it does not constitute the entire unwinding process. The complexities of reversing a finalized deal where investors have already received payouts remain unresolved, and the $1 billion fundraising has not yet been confirmed. Some Manus features, such as the links to Meta’s Ads Manager and Instagram, are still operational despite the data barrier, raising questions about the completeness of the separation. The ability of Manus to continue as an independent entity after losing access to Meta’s infrastructure and resources is uncertain, particularly if it must be restructured as a Chinese joint venture under more stringent regulatory oversight.