Sources: Tencent leads talks to buy back AI startup Manus from Meta for $2 bln after Beijing order

In a move that caught Beijing off guard, Meta's unexpected $2 billion acquisition of Manus—a Chinese startup specializing in advanced AI agents—has been ordered to be unwound by Chinese authorities. The deal has drawn sharp scrutiny from regulators who view the startup as a strategic asset.

Tencent Leads Buyback Effort

Chinese tech giant Tencent, an early investor in Manus during its initial funding rounds, is spearheading efforts to buy back the startup at the same $2 billion valuation. According to the Financial Times, other former investors—including China-based venture capital firms ZhenFund and HSG—may participate in the potential consortium. However, former U.S. investors such as Benchmark are unlikely to join.

Beijing's Growing Protectiveness of AI Assets

The intervention reflects Beijing's increasing protectiveness over its AI companies and experts, which it considers strategic assets amid intensifying rivalry with the United States. This stance is evident in the Chinese government's five-year plan, which emphasizes technological self-reliance. The measures have become so stringent that AI experts—even those employed by private firms—are now required to secure government approval before traveling internationally.

U.S. Tech Giants' Aggressive AI Hiring

U.S. tech companies are investing billions of dollars to develop their AI models, offering hundred-million-dollar bonuses to recruit top AI talent. One AI founder even claimed that Meta offered a $1.25 billion bonus. Chinese officials have described Meta's acquisition of Manus as "a conspiratorial attempt to hollow out China's technology base," according to the Financial Times.

Implications of the Unwinding Order

The order to undo the deal means Meta cannot use Manus's intellectual property, nor can it employ the startup's founders or staff. However, the U.S. tech giant had several months to study Manus's models and engineering expertise before the intervention.

Financial and Operational Challenges

Meta has already agreed to unwind the acquisition, and most of Manus's operations are reportedly running independently of the company. However, the Chinese startup must still break financially from Meta by repaying the $2 billion the American company spent to purchase it. While Chinese companies are also investing heavily in AI technology, raising such a large amount of capital in a short period remains challenging.

Tencent's Strategic Interest

Tencent, which operates the WeChat platform used by China's 1.4 billion population for messaging, social networking, mobile payments, ride-hailing, food delivery, and more, views Manus as a valuable asset. Beyond generating $500 million in annual revenue, Manus's AI agent aligns well with Tencent's growing AI focus.

"Beyond foundation models, it has become increasingly evident that agentic AI represents a breakthrough use case," Tencent president Martin Lau said during the company's May earnings call. "Our platform inherently has many benefits of hosting AI agents."

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