Mark Zuckerberg's Meta is retreating. The tech giant has begun dismantling its $2 billion acquisition of Manus, the Chinese-founded AI startup that was supposed to be a landmark exit for Beijing's AI scene.
Beijing issued a divestiture order roughly two months ago, citing national security concerns. Meta is now complying: the company has cut Manus off from its internal systems entirely, blocking employees from using Manus tools for internal projects.
No more data sharing. No more integration. The separation is complete on paper.
Manus co-founders are already plotting their next move. According to May reports, they are holding preliminary discussions about raising approximately $1 billion from outside investors to reclaim the startup from Meta. Their goal is a Chinese joint venture structure and an eventual Hong Kong listing—a venue that has attracted Chinese AI startups like MiniMax and Zhipu this year.
What was supposed to be a Silicon Valley success is becoming a cautionary tale about Beijing's control over strategic tech. China has expanded travel restrictions on researchers and executives, requiring government approval before they can leave the country. Top AI firms including ByteDance and Moonshot AI now need official sign-off before accepting U.S. investment.
Even as Meta unwinds the deal, Manus keeps shipping features. It recently rolled out integrations with Similarweb and Shopify. The startup's investors, including Tencent and Benchmark, are cashing out, with Asian backers cooperating with the unwinding process.
Meta and Manus have stayed silent. But the message from Beijing is clear: offshore incorporation will not protect you from Chinese control over cutting-edge AI. Zuckerberg learned that the hard way.
