With Meta-Manus AI deal ‘difficult’ to undo, how will Beijing exert its authority?

It could be “time-consuming”, “complex” and “difficult” for Meta Platforms to unwind its acquisition of Manus, an artificial intelligence start-up that originated in China, given how far the deal has gone, according to analysts. Beijing’s order on Monday blocking the US$2 billion deal came roughly four months after the acquisition was announced. During that time, Manus – developer of what it described as the world’s first general AI agent – provided Meta employees with unlimited-usage accounts, and some Meta teams held meetings and exchanged ideas with Manus staff members, according to a Meta employee. The integration proceeded even though Beijing announced a review of the transaction days after its announcement. The Manus team members moved into Meta’s offices in Singapore and were granted Meta corporate accounts and other access, the South China Morning Post reported in February. As Manus members have been integrated into Meta, “disentangling them ... is going to be tricky”, said Paul Triolo, senior vice-president for China and technology policy lead at DGA-Albright Stonebridge Group. “Unwinding the deal in practice will be time-consuming and complex,” said Yuwen Pei, a partner at law firm Lifeng Partners, adding that once Manus’ core technology had been absorbed into Meta’s ecosystem, restoring the status quo would be extremely difficult. “Given the acquisition has gone through, with employees and assets already integrated, and investors paid, it’s difficult to see how an unwinding would be accomplished,” said Tom Nunlist, associate director of tech and data policy at research consultancy Trivium China. Manus investors including Tencent Holdings, ZhenFund and HongShan Capital, previously known as Sequoia China, had received their proceeds, according to a Bloomberg report on Monday. None of the firms immediately responded to requests for comment on Tuesday. Unwinding the deal could involve equity reversals, asset disposals, termination of intellectual property licences, system disconnections, data access revocations and personnel reshuffling, said Hunter Su, a compliance expert at the Shanghai Artificial Intelligence Technology Association. Yuwen said challenges included the movement of key staff and know-how, as well as disputes over what a “complete separation” of technology and data would mean, likening the complexity to ByteDance’s years-long efforts to separate TikTok. If the parties involved in the deal “completely ignore their development in the China market and force the merger, the government cannot completely stop the transaction”, said Wei Hongxu, a researcher at Beijing-based think tank Anbound. However, Beijing could exert its authority by imposing restrictions on Manus’ financial accounts, data outflow and employees’ travel, Wei added. Beijing set a preliminary deadline of several weeks to reverse the transaction before it would consider punishing the relevant parties, according to a Monday report by the Wall Street Journal. Wei warned that sanctions could deal a blow to Manus’ valuation, as the AI industry was developing rapidly. Manus could be revalued as agent frameworks like OpenClaw had gained traction, with industry focus shifting towards open, local and replaceable models for personal agent systems, Su said. Manus rose to fame in March 2025 after releasing its agent of the same name. But the AI industry has transformed dramatically since then. “The emergence of other major approaches to agentic platforms, such as OpenClaw and others, means that while Manus last year appeared to be at least at the forefront or one of the leaders in putting together agentic AI platforms, calling tools and other things, now [it is] in a very different world,” Triolo said, adding that the value of Manus personnel to Meta “may be less salient than it was a year ago”. Manus initially operated in Beijing and Wuhan, but moved to Singapore by mid-June 2025, laying off some China-based staff and shutting down its Chinese social-media accounts. Yuwen said the case was likely to serve as a cautionary tale for other Chinese companies that pursued foreign investment or cross-border deals. They should assess filing obligations earlier, include regulatory-veto exit clauses and track export control and data transfer rules, she added. According to Lu Shengyun, founder of Shanghai-based LSY Consulting, the case showed that US-China AI competition was no longer just about chips or models but had broadened into areas of engineering and product design. “Particularly in the age of agentic AI, we’re seeing growing competition in areas like data and engineering harnesses,” he said, referring to the fact that Manus does not train its own models, but rather develops “harnesses”, which are the frameworks that turn AI models into functional agents.

With Meta-Manus AI deal ‘difficult’ to undo, how will Beijing exert its authority?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Case shows US-China competition has expanded beyond chips and models to areas of engineering and product design, analyst says

Case shows US-China competition has expanded beyond chips and models to areas of engineering and product design, analyst says