Meta has initiated the process of unwinding its $2 billion acquisition of Manus, a Chinese-founded AI startup, following a divestiture order from Beijing. This marks the first concrete step toward separating the two companies, which had previously shared data and systems. Bloomberg reported that Meta has cut Manus off from its internal systems, preventing employees from using Manus tools for internal projects as the separation progresses. The move reflects Beijing’s broader efforts to control strategically sensitive technology, regardless of a company’s offshore incorporation.
According to May reports, Manus’ co-founders have discussed raising approximately $1 billion from outside investors to reclaim the startup. This could lead to a Chinese joint venture structure and an eventual listing in Hong Kong, a market that has seen a surge in AI listings this year. However, the situation underscores Beijing’s determination to retain control over technology, as seen in expanded travel restrictions for researchers and executives, requiring government approval before leaving the country. Additionally, foreign capital is under tighter scrutiny, with reports indicating that top AI firms will need government sign-off before accepting U.S. investment.
Chinese regulators scrutinized the acquisition earlier this year, citing potential violations of technology export controls and foreign investment rules. Manus investors, including Benchmark and Tencent, have received proceeds from the acquisition, while Asian backers have indicated cooperation with the unwinding process. The Chinese origins of Manus, linked to parent company Butterfly Effect, drew scrutiny from both U.S. and Chinese authorities, including Senator John Cornyn’s questions about American capital flowing to a Chinese-linked firm. Meta and Manus did not immediately respond to a request for comment.
Source: techcrunch
