Manus founders are evaluating a plan to raise about $1 billion to buy the company back from Meta at a valuation of at least $2 billion, according to the report. The proposal also includes a restructuring into a China joint venture and a possible Hong Kong IPO. What makes the situation unusual is that Manus’s core technology has already been integrated into Meta’s services, while staff have already moved into Meta’s Singapore office.
Why the buyback is about structure, not code
The report frames the possible buyback as a reshuffling of leverage among three parties rather than an attempt to reclaim technology already handed over. For founders Xiao Hong and Ji Yichao, the move could serve two purposes: signaling cooperation to Beijing and creating a compliant vehicle to keep operating in China. The article says both founders have been placed under exit restrictions, meaning they can move within China but cannot leave the country.
For Meta, the economics look different. The integrated technology would remain inside Meta’s products even if the company were sold back. A deal could allow Meta to recover substantial cash, keep the benefits of the acquired technology, and avoid the geopolitical burden of directly operating an AI company in China.
What a $2 billion valuation means for investors
The reported outline calls for roughly $1 billion in fresh capital, with the remaining gap to be covered by the founders through self-funding or share swaps. At a valuation of at least $2 billion, new investors would effectively enter at Meta’s exit price, without a discount.
The proposed China JV structure is presented as a deliberate concession to regulators. A joint venture would place equity under a Chinese legal entity and subject the company to Chinese law, returning part of corporate control to the domestic regulatory framework. The Hong Kong listing option sits on top of that. In the report’s reading, Hong Kong offers access to international capital while attracting less geopolitical scrutiny than a U.S. listing.
No formal announcement has been made. The timetable remains open, and several points are unresolved, including whether the travel restrictions will be lifted, how the JV will be designed, and who might come in as cornerstone investors.
From breakout launch to regulatory halt in a few months
The timeline in the report starts in 2022, when Butterfly Effect was founded in Beijing by Xiao Hong, Ji Yichao, and Zhang Tao. In March 2025, Manus was launched and described as a general AI agent capable of tasks such as building webpages, analyzing stocks, and searching rental listings. Invitation codes were reportedly traded for as much as 200,000 yuan. In April 2025, Benchmark led a $75 million Series B round that valued the company at $500 million.
In June 2025, the company redomiciled to Singapore, laid off about 80 employees, and retained roughly 40 core R&D staff for relocation. Then in late December 2025, Meta announced an acquisition of Butterfly Effect for about $2 billion. The report said Xiao Hong would become a Meta vice president reporting to COO Javier Olivan. Regulatory pressure followed in 2026: China’s Ministry of Commerce said in January that it would review the case; in March, after meetings between the NDRC and executives from both sides, Xiao Hong and Ji Yichao were placed under exit restrictions; on April 27, the NDRC formally halted the deal and ordered both parties to withdraw the investment project without giving a specific reason.
The deal now turns on two unanswered questions in the report: whether Beijing would accept the proposed structure, and whether investors would back a $2 billion valuation for a company whose core technology has already been absorbed into Meta’s ecosystem.