Early investors in Manus are preparing to buy the artificial intelligence start-up back from Meta for the same $2 billion that the social media giant originally paid, according to media reports. The move follows an order from the Chinese government in April requiring Meta to unwind the acquisition. The buyback would return Manus to a group of early backers and mark an unusual reversal for one of the most closely watched AI deals in recent years.

People familiar with the plans say HSG, ZhenFund, Tencent and other early Manus investors are participating in the re-acquisition. HSG and ZhenFund are considering using fresh capital to fund their portion of the buyback. Benchmark, another early investor, is reportedly not taking part.

Key facts at a glance

• Early Manus backers are preparing to re-acquire the company from Meta for $2 billion, the original purchase price.
• HSG, ZhenFund, Tencent and other early investors are involved in the buyback.
• HSG and ZhenFund are considering using new capital for the deal.
• Benchmark is not participating, according to reports.
• Manus has grown rapidly since December, with annualised revenue rising from $100 million at the time of the acquisition to between $400 million and $500 million now.
• Meta has completed operational separation from Manus and halted data-sharing with the start-up.
• Manus is considering becoming a China-incorporated joint venture, a structure that could lead to a Hong Kong listing.
• Meta had planned to use Manus-like technology in an internal AI initiative aimed at replacing human workers.
• Emily Dalton Smith, a key executive on that internal AI effort, reportedly plans to leave Meta.

From acquisition to unwinding

Manus was founded in China and is based in Singapore, giving it a cross-border profile that has become increasingly complicated in the global AI sector. Meta acquired the company in December, but the deal soon ran into regulatory headwinds. In April, the Chinese government ordered Meta to unwind the acquisition, a rare intervention that underscored how national security, data sovereignty and strategic technology are reshaping cross-border dealmaking.

Meta has since moved to separate its operations from Manus. Reports this week said the company had completed operational separation from the start-up and halted data-sharing. The separation is a critical step in any unwinding process, because it reduces the risk of continued integration between Meta’s platforms and Manus technology while the ownership structure is resolved.

The proposed buyback would return Manus to a group of investors who backed it before Meta stepped in. That group includes HSG, ZhenFund, Tencent and others. Their willingness to re-acquire the company at the original $2 billion price suggests they see significant value in Manus, particularly after its revenue growth accelerated over the past several months.

Revenue growth changes the calculus

When Meta agreed to buy Manus in December, the start-up’s annualised revenue run rate was about $100 million. Since then, that figure has climbed to between $400 million and $500 million, according to reports. That represents roughly four to five times growth in a matter of months, a pace that would make the original $2 billion price look increasingly attractive to early backers.

The revenue expansion also raises questions about whether Meta is giving up a fast-growing asset at a discount. For Meta, however, the decision is not purely financial. The Chinese government’s order to unwind the deal left the company with limited options. Completing a separation and allowing the original investors to buy back the company may be the cleanest path to compliance while avoiding a prolonged dispute.

For the early backers, the buyback is an opportunity to regain control of a company that has become more valuable since the original deal. If HSG and ZhenFund use fresh capital, they may be able to restructure the ownership in a way that supports future growth, including a potential public listing.

Hong Kong listing and China joint venture

Manus is considering changing its structure to become a joint venture incorporated in China, according to reports. Such a move could pave the way for a Hong Kong market listing. Hong Kong has become a popular destination for Chinese AI companies seeking access to international capital while remaining close to mainland markets and regulators.

Several Chinese AI start-ups, including Zhipu and MiniMax, have found success with Hong Kong listings in recent months. Their receptions have encouraged other companies to explore similar routes. For Manus, a Hong Kong listing could provide liquidity for early investors, fund further expansion and establish a public currency for acquisitions or talent retention.

A China-incorporated joint venture structure would also address some of the regulatory concerns that complicated the Meta acquisition. By creating a vehicle that is clearly rooted in China, Manus could operate more easily within Chinese rules while maintaining its Singapore base and international ambitions. The exact structure has not been finalized, and any listing would depend on market conditions and regulatory approvals.

Meta’s internal AI ambitions

Meta had reportedly planned to use Manus-like technology in an internal initiative to apply AI to replace human workers. The idea was to deploy AI agents that could handle tasks traditionally performed by employees, improving efficiency across the company. The Manus acquisition would have given Meta access to technology and talent suited to that goal.

With the acquisition being unwound, those plans may need to be adjusted. Emily Dalton Smith, a key executive involved with applying Manus-like technology to Meta’s internal AI agents, reportedly said in an internal memo earlier this week that she planned to leave the company. Her departure could signal a shift in Meta’s internal AI strategy or a slowdown in the specific initiative tied to Manus technology.

The internal AI effort reflects a broader trend across the technology industry. Companies are experimenting with AI agents that can automate workflows, answer questions, write code, analyze data and interact with customers. The race to build and deploy such systems has intensified competition for AI talent and start-ups. Meta’s interest in Manus was part of that larger push.

Investor dynamics and Benchmark’s absence

The buyback group is notable for who is participating and who is not. HSG, ZhenFund and Tencent are among the early backers stepping in, while Benchmark is reportedly not participating. The absence of Benchmark, a prominent venture capital firm, could reflect differing views on the deal’s risk, the valuation, or the governance structure that would follow.

Early investors often have rights that allow them to participate in a buyback or to block a sale to a third party. Their willingness to fund the re-acquisition with fresh capital suggests they believe Manus can continue growing independently. It also indicates that they see a path to liquidity, possibly through a Hong Kong IPO, that would reward their renewed commitment.

Tencent’s involvement adds another layer of strategic interest. As a major Chinese technology company with extensive investments in AI, gaming, cloud computing and social media, Tencent could provide Manus with distribution, infrastructure and access to customers. Its participation may also help Manus navigate Chinese regulatory requirements.

Regulatory and geopolitical context

The Manus case is a vivid example of how geopolitics is reshaping the AI industry. The United States and China have both tightened scrutiny of cross-border technology deals, particularly those involving advanced AI, data and critical infrastructure. Governments are increasingly treating AI as a strategic asset, not just a commercial opportunity.

China’s order to unwind the Meta acquisition was unusual in its directness. It signaled that Beijing is willing to intervene when it believes a deal could compromise national interests or transfer sensitive technology abroad. Meta’s compliance, including operational separation and halting data-sharing, shows how seriously the company is treating the order.

For other start-ups with cross-border operations, the Manus episode offers a cautionary tale. Founders and investors must consider not only commercial terms but also regulatory approvals, data governance and geopolitical risk. Deals that once seemed straightforward can become entangled in national security reviews, export controls and political tensions.

What comes next for Manus

If the buyback is completed, Manus would return to a familiar investor base with a stronger revenue profile. The company could then pursue a new strategy, including a China-incorporated joint venture and a potential Hong Kong listing. Those steps would require careful structuring to satisfy regulators in multiple jurisdictions.

The AI market continues to expand rapidly, and demand for agentic AI systems is rising. Manus is positioned in a hot segment, and its revenue growth suggests it has found product-market fit. The challenge will be to sustain that growth while managing the legal and regulatory complexities that come with its cross-border identity.

Meta, meanwhile, must decide how to pursue its internal AI goals without Manus. The company has vast resources and its own AI research teams, but the unwinding may slow specific projects. The departure of Emily Dalton Smith, disclosed in an internal memo, adds uncertainty to that effort. Her last day and the future of the internal AI agent initiative were not immediately clear.

Source:Silicon UK News