China’s regulators have ordered Meta to unwind an acquisition that had already been completed five months earlier, creating an extraordinary case of a “self-buyout” for Manus AI.
According to Bloomberg on the 21st (local time), Manus is considering raising up to $1 billion, or nearly 1.5 trillion won, to buy back the stake now held by Meta.
The situation is unusual. This is not a failed acquisition, but a completed deal being rolled back under external pressure. The order to undo it came from the Chinese government. Manus has chosen to comply, while seeking to take the company back into its own hands rather than leaving it with Meta.
◆ An order to unwind a deal completed five months ago
Meta acquired Manus last December for about $2 billion, or roughly 3 trillion won. Manus is a company that develops so-called agentic AI, which can take on a relatively large task from a user and independently carry out multiple steps on its own.
It can search for information, organize it, create documents, and even write code, all without human intervention. It is a more advanced form than conversational AI such as ChatGPT. Meta had hoped to use the technology to strengthen its own AI and gain an edge over Google and OpenAI.
The problem lay in Manus’s origins. The company was originally founded in China by Chinese engineers in 2022.
After raising investment under U.S.-led backing last year, it moved its headquarters and core staff to Singapore and reduced much of its workforce in China. Its operating entity was also changed to Butterfly Effect, registered in Singapore. By the time Meta bought it, Manus was, on paper, clearly a Singaporean company.
On April 27, China’s National Development and Reform Commission (NDRC) ordered Meta to reverse the transaction. The main grounds were twofold: the possibility that Chinese investment-related regulations had been violated, and concerns over strategic technology leaving the country.
The NDRC viewed Manus as still subject to Chinese investment review because its technological roots were in China and many of its key personnel had previously worked there, even though it had been re-registered as a Singapore company.
◆ Buying it back could cost 1.5 trillion won, and the valuation is rising
Manus’s response, as reported by Bloomberg, is not a simple cancellation of the deal. It is reportedly considering raising as much as $1 billion from outside investors to buy back the stake held by Meta.
The funds would be used in three ways: purchasing Meta’s stake, separating the data and organizations of the two companies, and providing operating capital to support Manus for the next year as it stands on its own.
What is striking is the price. If the fundraising succeeds, Manus’s valuation would exceed the $2 billion Meta paid last December. In effect, the effort to unwind the deal would turn into a financial transaction that raises the company’s price even further.
That confidence is grounded in performance. Manus surpassed an annualized revenue run rate of $100 million just eight months after launching its first general-purpose AI agent.
For a startup with about 100 employees, that is a significant achievement in a short time. In an investment round led by Benchmark last April, the company’s valuation was $500 million. Eight months later, Meta’s purchase price had climbed to four times that level.
◆ “Moving to Singapore does not make you safe”
The implications of this case extend beyond Manus alone. The NDRC’s decision is seen as the clearest example yet of China extending its investment review scrutiny to a Singapore-headquartered company. The signal is that any company with technology rooted in China may still fall under Chinese review, regardless of where it is currently incorporated.
U.S. law firm O’Melveny noted in a legal analysis that the decision sets an important precedent. Any transaction in which a U.S. buyer acquires a company with Chinese origins should take this case seriously, regardless of where the company is registered.
The message for lawyers handling cross-border investments is clear: simply moving headquarters to Singapore cannot fully eliminate the risk of Chinese investment review.
All of this sits within the broader context of the U.S.-China confrontation over AI supremacy. Washington has tightened restrictions on investment in China and export controls on semiconductors, while Beijing continues to emphasize self-reliance in its domestic AI technology. Manus’s failed acquisition is an event that unfolded at the center of that clash.
For Manus, the fundraising is a choice to stand on its own, but to do so properly. It aims to survive as an independent Singapore-based company while securing enough capital to endure in the fiercely competitive agentic AI market.
Coincidentally, in the same week, OpenAI announced plans to establish an applied AI research institute in Singapore with an investment of $235 million. Singapore is emerging as an Asia-Pacific hub for companies that align closely with the Western camp while also valuing AI sovereignty.
For now, however, nothing has been finalized. Manus has not disclosed whom it is discussing the 1.5 trillion won fundraising with, or when it expects to complete it. The political decision to unwind the acquisition is over, but turning that decision into financial reality has only just begun.
The next turning point will be whether Manus makes an official fundraising announcement or Meta discloses the specific terms for settling the deal. Which side appears first within the deadline set by China will be the key point to watch.