Meta has cut all ties with Manus, finishing an operational separation that halts data sharing and severs system access. The move follows Beijing’s order in April to reverse the $2 billion acquisition, which law firm Zhonglun called an unprecedented application of China’s foreign investment security review. Now Manus’s co-founders are in early talks to raise roughly $1 billion from outside investors to buy the company back — a deal that could lead to a Chinese joint venture structure and a Hong Kong listing.
Why Beijing pulled the plug
China’s antitrust and security regulators ordered Meta to unwind the purchase, targeting what analyst Tilly Zhang described as a “leading Chinese AI firm turning away from the domestic market.” The decision came under a review process that Beijing has since expanded. New outbound investment rules taking effect July 1 extend the government’s reach to markets including Taiwan and allow punishment of foreign firms from countries that restrict Chinese investment. Those rules give regulators a broader hammer over deals they see as strategic leakage.
Manus, built by parent company Butterfly Effect, had relocated its headquarters and core teams to Singapore in mid-2025 — months before Meta announced the $2 billion deal in December. The move was part of a trend analysts call “Singapore washing”: shifting operations to the city-state, courting Western capital, and trying to present a clean break from China. Beijing’s April order made clear that strategy no longer works.
What a buyback could look like
If the co-founders pull off the roughly $1 billion raise, Manus would exit Meta’s control and likely land in a joint venture owned by Chinese investors. That setup would clear the path for a Hong Kong initial public offering — a route already taken this year by Chinese AI firms MiniMax and Zhipu. Hong Kong has seen a surge in AI company debuts, and Manus’s founders appear to be betting they can join that wave.
The talks are still early, and the regulatory hurdles are untested. No one has tried to buy back a company that was forcibly divested under a foreign investment security review in China. The co-founders are asking investors to back a structure that has no precedent — and to do it quickly, before the July 1 rules take effect and complicate any cross-border component of the deal.
Whether Beijing will sign off on a buyback — and on what terms — remains the open question that will determine if Manus gets its independence back or stays tethered to an unwound deal.
