Meta has started the process of unwinding its $2 billion purchase of Manus by completing an operational separation from the Chinese-founded AI startup and stopping all data exchanges between the entities. This action represents the clearest move yet to follow a divestiture directive issued by Beijing nearly two months ago based on national security considerations.

Meta has disconnected Manus from its internal platforms, according to Bloomberg, which stops staff from accessing Manus tools for company projects as both sides progress toward complete independence.

At the same time, reports from May indicate that Manus co-founders have begun early talks to secure roughly $1 billion from new investors in order to buy back the startup from Meta. This step could enable a Chinese joint venture setup and a potential listing in Hong Kong, a market that has attracted several AI company debuts this year including MiniMax and Zhipu.

The planned landmark exit for Chinese AI is now falling apart. The development highlights Beijing focus on keeping strategic technology under domestic control even when firms are incorporated overseas.

Beyond the required divestiture, Chinese officials have broadened travel limits for researchers and leaders at private companies, mandating official approval for any international trips. China is also restricting foreign funding, with indications that leading AI entities such as Moonshot AI, StepFun, and ByteDance must obtain government clearance before taking U.S. investment, extending Beijing oversight of the sector.

While Meta works to end connections with Manus, the agentic AI firm has kept releasing updates, including new links with Similarweb and Shopify.

Manus gained notice through a popular agent demonstration after moving its team to Singapore in mid-2025 and then revealing the $2 billion Meta deal in December. Regulators in China began reviewing the transaction earlier this year over possible breaches of technology export rules and foreign investment guidelines.

Investors in Manus such as the California venture firm Benchmark have already collected their acquisition payouts, while Asian supporters including Tencent, HSG, and ZhenFund have signaled readiness to assist in the reversal process, per the WSJ.

Manus roots in China through parent Butterfly Effect attracted attention from both Washington and Beijing, including questions from Senator John Cornyn on whether U.S. funds should support a firm with Chinese ties.

Meta and Manus offered no immediate replies to comment requests outside standard hours.