China orders Meta to unwind Manus $2B

China’s order forcing Meta to unwind its acquisition of Manus has become a test case for how far Beijing is prepared to go to keep AI talent, code and control inside China. The deal had already closed in December, according to Reuters, and Manus had publicly said it was “now part of Meta” and would keep operating from Singapore. Weeks later, China’s foreign investment security review machinery moved to reverse it. The founders are now discussing how to pull the company back out. ### How unusual is it for Beijing to reverse a deal after it has already closed? April 27 is the key date. Reuters reported that China’s National Development and Reform Commission ordered Meta to unwind its $2 billion-plus purchase of Manus and required the parties to withdraw the transaction, citing foreign investment rules applied to the project. Reuters said the acquisition had been completed in December 2025, after Meta bought the startup through its Singapore structure. Manus itself had announced on December 29 that it was “joining Meta,” said it would continue selling subscriptions through its app and website, and said operations would continue from Singapore. (economictimes.indiatimes.com) ### Why did Manus’s Singapore structure become central to the dispute? May 2025 is where the corporate trail begins to matter. Reuters reported that Manus received a $75 million funding round led by Benchmark, shut its China offices in July, laid off dozens of employees, and moved operations to Singapore without Chinese regulatory approval. That allowed parent company Butterfly Effect to re-incorporate in Singapore, Reuters reported. (manus.im) Singapore remained central even after the Meta deal. Manus said in its own announcement that “the company will continue to operate from Singapore,” while also telling users the business would remain on its app and website. ### Which founders are caught in the middle of the unwind? Xiao Hong and Ji Yichao were summoned to Beijing in March and then barred from leaving China, Reuters reported, citing five sources familiar with the matter. (economictimes.indiatimes.com) Reuters said the exit bans were imposed after talks with regulators. (manus.im) Bloomberg, as carried by The Edge Singapore and other outlets, said a third founder, Zhang Tao, is also involved in current discussions about how to comply with Beijing’s order. The three founders are now weighing financing options to reverse the sale. ### Where does the reported $1 billion buyback plan come from? (economictimes.indiatimes.com) May 21 brought the clearest account of the founders’ options. Bloomberg reported that Xiao Hong, Ji Yichao and Zhang Tao are discussing a funding round of about $1 billion from external investors to buy back the Chinese-founded AI operation from Meta. The round would value Manus at at least the $2 billion Meta paid, according to people familiar with the matter. (theedgesingapore.com) Bloomberg also reported that the founders may contribute some of their own money, though the talks remain preliminary and could still fall apart. Meta did not immediately comment to Bloomberg, and a Manus spokesperson did not immediately respond, the report said. ### What structure are the founders discussing after a buyback? (theedgesingapore.com) A China joint venture is the main structure now under discussion. Bloomberg reported that, if the financing goes ahead, the next step would be to set Manus up as a Chinese JV with new backers and then pursue a Hong Kong initial public offering. (theedgesingapore.com) The practical problem is separation. Bloomberg said it remains unclear how new owners would carve out Manus’s agentic AI technology because much of it has already been integrated into Meta’s systems. Reuters separately reported that Manus staff had already moved into Meta’s Singapore offices and projects were continuing even while the founders faced travel restrictions. (theedgesingapore.com) ### What can readers watch next? Hong Kong is the named destination in the current plan. Bloomberg said the founders’ next formal step, if they secure backing, would be a China JV followed by a Hong Kong listing process. Meta’s own Manus webpages still describe the company as part of Meta, while Beijing’s order requires the transaction to be withdrawn. (theedgesingapore.com) The next public markers are likely to be any change in Manus’s corporate disclosures, a financing announcement involving Xiao Hong, Ji Yichao and Zhang Tao, or a Hong Kong filing linked to a new JV structure. (manus.im)