Meta has erected a data firewall between itself and Manus, blocking both sides from accessing each other’s internal systems and stopping Meta employees from using Manus tools in internal projects. Bloomberg reported, citing an internal memo, that the company is “gradually winding down” the service. Staff were told to move existing Manus projects onto Meta systems and stop launching new work on the platform.
A completed deal now being reversed
The acquisition had once been framed as a high-profile example of a Chinese AI startup reaching the global stage. In December 2025, Meta announced the purchase of Manus parent company Butterfly Effect. Manus became known for a general-purpose AI agent product, and in less than eight months after launch, its annualized revenue had exceeded $100 million. In April this year, the company also raised a $75 million Series B led by Benchmark, with Tencent and Sequoia China among the investors.
Manus founders Xiao Hong, Ji Yichao and Zhang Tao built the company in China before relocating its headquarters and core staff to Singapore ahead of the acquisition announcement. At the time, Meta said Manus no longer had an ongoing Chinese ownership interest and pledged to end its services in China. That did not settle the matter. In late April, China’s National Development and Reform Commission ordered the deal to be unwound on national security grounds under the country’s foreign investment security review mechanism. The case marked the first time that process had been used to force the breakup of a cross-border transaction after closing.
Same office, separate systems
According to the report, the separation is not symbolic. People familiar with the matter described a hard barrier with no exceptions between Meta and Manus systems. Manus employees have already moved into Meta’s Singapore office, yet the two sides cannot share internal platforms even while working under the same roof.
As the transaction is being dismantled, Manus founders are discussing a financing plan to buy the company back. The reported target valuation is at least the $2 billion Meta originally paid, and the repurchase would require about $1 billion in cash. It remains unclear whether investors that already received proceeds from the Meta deal, including Tencent, ZhenFund and Sequoia China, will join those talks.
Product work has not stopped
Manus is still shipping product changes while the regulatory process unfolds. According to notices on its website, the company continued integrating Similarweb’s analytics service after Beijing issued its order, and it also added Shopify e-commerce functions. As of this week, users could still connect Manus with Meta Ads Manager, Instagram, Gmail and GitHub.
The case sets a new marker for cross-border AI dealmaking. China’s order shows that a technology acquisition completed outside the country can still face intervention later, raising the legal complexity for AI startups trying to use offshore structures or relocation to access global capital markets.