Meta restricts Manus' access to data systems and starts to reverse the agreement.

      TL;DR: Meta has cut off Manus from its internal systems and directed its employees to phase out the platform. The $2 billion acquisition is being unwound following a directive from Beijing in April, and Manus's founders are seeking to raise $1 billion for a buyback.

      Meta has established a data firewall separating itself from Manus, the Chinese-founded AI service it acquired for $2 billion in December 2025. Since early June, Manus and its personnel have been prohibited from accessing Meta’s internal data systems, and Meta staff can no longer use Manus tools for internal projects, as reported by Bloomberg. An internal memo reviewed by Bloomberg instructed employees to transfer existing Manus projects to Meta's systems and refrain from starting new projects on the platform. Meta is in the process of "sunsetting" Manus, according to the memo.

      Reasons for the deal’s unwinding

      In April 2026, China’s National Development and Reform Commission ordered the deal to be unwound following a four-month regulatory investigation that swiftly followed the acquisition announcement. 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 authorities restricted co-founders Xiao Hong and Ji Yichao from leaving China and summoned them for questioning in Beijing. This intervention sent a clear message to Chinese AI entrepreneurs: relocating to Singapore does not exempt them from Beijing’s authority.

      The buyback initiative

      The three founders of Manus—Xiao Hong, Ji Yichao, and Zhang Tao—are evaluating ways to secure about $1 billion from external investors to finance a buyback at a valuation equal to the $2 billion that Meta paid. The founders may use their own funds for the remainder, according to Bloomberg's report last month. Should the buyback occur, the next step would involve establishing Manus as a Chinese joint venture with those investors in anticipation of a potential IPO in Hong Kong. However, it remains uncertain how far the fundraising discussions have advanced.

      What remains interconnected

      Despite the operational separation, Manus has continued to introduce new features. It has integrated data from Similarweb, added e-commerce capabilities through Shopify, and as of 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, including Tencent, ZhenFund, and HSG, have already received returns from the acquisition, complicating efforts to fully reverse the transaction.

      From a viral demonstration to a cautionary example

      Launched in invitation-only beta in March 2025, Manus garnered over one million views within 20 hours of its demo video release, showcasing an autonomous AI agent capable of browsing the web, coding, file management, and completing complex tasks independently. It was celebrated as China’s second “DeepSeek moment,” a significant development that could compete with Silicon Valley's lead in agentic AI.

      The journey from a viral demo to a $2 billion deal to regulatory disassembly occurred in under a year. China has since implemented stricter outbound investment regulations that provide regulators with enhanced tools to block cross-border AI transactions involving technology, talent, or intellectual property with Chinese roots, regardless of the company's country of incorporation.

      The warnings

      The operational separation marks a step toward unwinding the acquisition but is not the complete unwinding itself. The financial logistics of reversing a finalized deal with previously compensated investors are still unsettled, and the $1 billion fundraising endeavor is yet to be confirmed. Certain Manus functionalities, such as connections to Meta’s Ads Manager and Instagram, remain active despite the data firewall, raising concerns about the depth of the separation. It is uncertain whether Manus can operate successfully as an independent entity after losing access to Meta’s infrastructure and resources, especially if it must reform as a Chinese joint venture under increased regulatory scrutiny.