Meta has finished pulling apart its operational ties with Manus, the Singapore-based AI startup it tried to acquire late last year. Data sharing between the two companies has been halted, marking the practical end of what was supposed to be a landmark deal in the agentic AI space.
The split didn’t happen by choice. China’s National Development and Reform Commission ordered a full unwinding of the transaction back in April, citing national security concerns. Meta is now stripping previously transferred technology and data from its systems.
How the deal fell apart
On December 30, 2025, Meta announced it would acquire Manus for somewhere between $2 billion and $2.5 billion. Manus, founded by Chinese entrepreneurs Xiao Hong, Ji Yichao, and Zhang Tao, had built a platform specializing in autonomous AI agents. The startup had processed more than 147 trillion tokens and served millions of users.
On April 27-28, 2026, the Chinese government blocked the deal outright. The NDRC didn’t just say “no” to the acquisition going forward. It mandated the complete unwinding of the entire transaction, including the return of Chinese assets and the removal of any transferred technology and data from Meta’s systems.
The directive gave Meta a deadline estimated at several weeks to complete the disentanglement. By May and June 2026, the operational separation was underway, with Meta systematically dismantling what had already been partially integrated into its systems.
The founders’ $1 billion problem
For Manus’s founding team, the fallout is deeply personal and financially complex. Xiao Hong, Ji Yichao, and Zhang Tao have been seeking to raise approximately $1 billion from investors to facilitate a buyback of their stakes and ensure a clean separation from Meta.
The challenge is compounded by the fact that some investors had already been paid out as part of the original deal. Unwinding those payouts while simultaneously raising fresh capital creates a financial puzzle that would make most CFOs sweat through their shirts.
Manus’s investor roster includes Tencent and ZhenFund on the Chinese side, alongside Benchmark from the US. Each of those investors now faces a fundamentally different return profile than what they signed up for. The original deal would have delivered a clean exit. Instead, they’re looking at a company that needs to reconstitute itself as an independent entity while navigating the expectations of two governments that are increasingly treating AI technology as a national security asset.
What this means for investors
Cross-border AI acquisitions just got meaningfully harder to execute. The precedent Beijing has set here, ordering a full unwinding after partial integration, raises the risk profile for any similar deal.
For Meta specifically, the loss of Manus’s agentic AI capabilities creates a gap in its product roadmap. A platform that had processed over 147 trillion tokens and built a significant user base represented real technological value.
Manus was based in Singapore. The jurisdiction of incorporation didn’t matter. What mattered was where the founders came from and where the technology originated.