Meta is reportedly moving to cancel the $2 billion Manus deal following Beijing’s request

Meta has begun unwinding its $2 billion acquisition of Manus, completing an operational separation from the Chinese AI startup and halting data sharing between the two companies. This is the most concrete step yet toward compliance with Beijing’s divestment order About two months ago For reasons related to national security.

Meta has isolated Manus from its internal systems, Bloomberg reported, Banning employees from using Manos tools for internal projects as the two companies move toward a complete separation.

Meanwhile, according to May reportsthe co-founders of Manus have held preliminary discussions about raising nearly $1 billion from outside investors to take the startup back from Meta, a move that could pave the way for a Chinese joint venture structure and an eventual listing in Hong Kong, a place that has seen a surge in AI listings this year for Chinese AI startups like Mini Max and Zivo.

What was supposed to be a landmark breakthrough for Chinese AI is rapidly unraveling. The move underscores Beijing’s determination to retain control of strategically sensitive technology, regardless of the company’s establishment abroad.

In addition to the forced dispossession, the Chinese authorities have since Expanded travel restrictions For researchers and executives in private companies, which require government approval before heading abroad. China is It also tightened its grip on foreign capitalWith reports suggesting that major AI companies, including Moonshot AI, StepFun and ByteDance, will need government approval before accepting US investment, adding another layer to Beijing’s sweeping efforts to control its AI sector.

Even as Meta moved to sever ties with Manus, the AI ​​startup has continued to offer new features and roll out integrations with Similar site and Shopify.

Manus drew widespread attention with a viral demo that moved its employees to Singapore in mid-2025 before announcing a $2 billion acquisition of Meta in December. Chinese regulators moved to scrutinize the deal earlier this year, citing potential violations of technology export controls and foreign investment rules.

Manus investors, including California-based investment firm Benchmark, have already received their proceeds from the takeover, while Asian backers, including Tencent, HSG and ZhenFund, have indicated they will cooperate with the spin-off, according to Wall Street Journal.

Manos’ Chinese origins with parent company Butterfly Effect have drawn scrutiny on both sides of the Pacific, with Sen John Cornyn interrogation Whether US capital should flow into a China-linked company.

Meta and Manos did not immediately respond to a request for comment outside normal business hours.