Meta has disconnected Manus from its data systems and has started to dismantle the agreement.

      TL;DRMeta has barred 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 in April, and Manus’s founders are seeking $1 billion for a buyback.

      Meta has established a data firewall that separates itself from Manus, the Chinese-founded 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 internal initiatives, as reported by Bloomberg.

      An internal memo obtained by Bloomberg instructed employees to transfer ongoing Manus projects to Meta’s own systems and to refrain from initiating new work on the platform. Meta is in the process of “sunsetting” Manus, according to the memo.

      Reasons for the deal's reversal

      In April 2026, China's National Development and Reform Commission ordered the dissolution of the deal after a four-month regulatory investigation that started shortly after the acquisition was announced. The NDRC determined that the transaction breached foreign investment and technology export regulations, 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 to Beijing for questioning. This intervention made it clear to Chinese AI founders that being incorporated in Singapore did not exempt them from Beijing’s scrutiny.

      The buyback proposal

      The three founders of Manus—Xiao Hong, Ji Yichao, and Zhang Tao—are looking for ways to raise around $1 billion from outside investors to fund a buyback at a valuation equivalent to the $2 billion Meta invested. According to Bloomberg’s report from last month, the founders might also contribute their own funds to cover the remainder.

      If the buyback is successful, the next phase would involve re-establishing Manus as a Chinese joint venture with these investors, in anticipation of a potential IPO in Hong Kong. It is still uncertain if the discussions for fundraising have made significant progress.

      Remaining connections

      In spite of the operational separation, Manus has continued to roll out new features. It has integrated data from Similarweb, added e-commerce functionality from Shopify, and even this week still allows users to connect with Meta’s Ads Manager, Instagram, Gmail, and GitHub.

      Manus employees have relocated to Meta’s offices in Singapore. Investors such as Tencent, ZhenFund, and HSG have already received returns from the acquisition, complicating efforts to fully reverse the deal.

      From viral demo to cautionary lesson

      Manus debuted in an invitation-only beta in March 2025 with a demo video that garnered over a million views in just 20 hours, displaying an autonomous AI agent capable of browsing the web, coding, managing files, and executing multi-step tasks independently. This was hailed as China's second significant breakthrough in agentic AI, potentially challenging Silicon Valley's supremacy in this area.

      This entire trajectory, from a viral demo to a $2 billion acquisition to regulatory backlash, unfolded in less than a year. China has since implemented stricter outbound investment regulations, equipping regulators with enhanced tools to obstruct cross-border AI transactions involving Chinese-origin technology, talent, or intellectual property, irrespective of the company’s place of incorporation.

      The concerns

      The operational split marks a step towards the unwinding of the acquisition rather than the process itself. The complexities involved in reversing a finalized deal where investors have already been compensated remain unresolved, and the $1 billion fundraising initiative has not yet been confirmed.

      Some Manus features, such as connections to Meta’s Ads Manager and Instagram, remain active despite the data firewall, raising concerns about the extent of the separation. It remains uncertain whether Manus can sustain itself as an independent entity after losing access to Meta’s infrastructure and resources, especially if it has to reorganize as a Chinese joint venture subject to stricter regulatory oversight.