Early backers of Manus are preparing to buy the artificial intelligence start-up back from Meta for the $2 billion originally paid, according to reports, after Chinese authorities ordered the social media group to unwind the acquisition. The move would reverse one of the most closely watched cross-border AI deals involving a China-founded, Singapore-based company and a US technology giant.

HSG, ZhenFund, Tencent and other early Manus investors are participating in the buyback, with HSG and ZhenFund considering using fresh capital to fund their share, the reports said. Early investor Benchmark is reportedly not taking part.

Key facts

• Manus early backers are preparing a $2 billion buyback from Meta.
• China ordered Meta in April to unwind the acquisition.
• HSG, ZhenFund, Tencent and other early investors are participating; Benchmark is not.
• HSG and ZhenFund are considering fresh capital for the buyback.
• Manus annualised revenue run rate has risen from $100m at the time of the December deal to between $400m and $500m.
• Manus is considering a China-incorporated joint venture structure that could lead to a Hong Kong listing.
• Meta has completed operational separation from Manus and halted data-sharing.
• Meta had planned to use Manus-like technology in an internal AI initiative aimed at replacing human workers.
• Emily Dalton Smith, a key executive involved in applying Manus-like technology to Meta internal AI agents, reportedly plans to leave.

The reported buyback talks underline how quickly the commercial outlook for Manus has changed since the December transaction. At the time of the deal, the company’s annualised revenue run rate was about $100 million. It has since risen to between $400 million and $500 million, according to the reports, a four- to five-fold increase that makes the original $2 billion price look different in hindsight.

Manus is not a conventional consumer app. It has positioned itself in the emerging market for AI agents, software systems that can carry out multi-step tasks with limited human supervision. That category has attracted intense interest from venture investors and large technology companies because it promises to move AI from chat-based assistance toward automated work. For Meta, the appeal of Manus-like technology was reportedly tied to an internal initiative to use AI to replace human workers, a sensitive area for any large employer.

A reversal after regulatory pressure

The original acquisition had already become a test case for how cross-border technology deals involving Chinese founders are handled. Manus was founded in China and is based in Singapore, a structure common among start-ups seeking global customers while retaining engineering and product links to China. The arrangement can create regulatory complexity when a US acquirer becomes involved, particularly in AI, data handling and advanced software.

The Chinese government ordered Meta in April to unwind the acquisition, according to the reports. The decision placed the transaction in a small group of cross-border tech deals that have been forced into reverse after completion. It also left investors and employees facing questions about governance, ownership and future fundraising. A buyback at the original $2 billion price would provide a clean exit for Meta while returning the asset to investors who already know the business.

The participation of HSG, ZhenFund and Tencent is significant. All three have deep experience in Chinese technology and early-stage company building. HSG and ZhenFund are reportedly weighing fresh capital, suggesting that the buyback is not simply a paper reshuffle of existing holdings but may require new money. Tencent’s involvement adds another layer because the company is both a major investor and a strategic player in AI and cloud services.

Benchmark’s reported absence from the buyback is notable because early venture investors often seek to maintain exposure to fast-growing companies. Its decision not to participate could reflect portfolio strategy, liquidity considerations or uncertainty about the company’s next structure. The reports did not provide a reason.

Revenue growth changes the calculus

The most striking detail in the reports is the pace of Manus’s revenue growth. Moving from a $100 million annualised run rate to $400 million or $500 million in a matter of months would place the company among the faster-growing enterprise AI businesses. Annualised run rate is not the same as audited annual revenue, but it is closely watched by investors as a signal of demand.

For the backers considering a buyback, the higher run rate changes the investment case. At $2 billion, the original price would represent roughly four to five times the midpoint of the current run rate, compared with about 20 times the run rate at the time of the December deal. That arithmetic helps explain why early investors may be willing to use fresh capital. It also explains why Meta might prefer a clean separation rather than a prolonged dispute.

The revenue growth does not remove all risks. AI agent companies face questions about gross margins, computing costs, customer retention and competition from larger model providers. Enterprise customers may test multiple vendors before committing to long-term contracts. Revenue run rates can also be volatile when they are based on recent monthly performance rather than contracted annual subscriptions.

Hong Kong listing option

Manus is considering changing its structure to become a joint venture incorporated in China, according to the reports, a move that could lead to a Hong Kong market listing. Such a structure would represent a significant shift for a company that has operated with a Singapore base and global ambitions. It would also align the company more closely with the Chinese regulatory system at a time when Beijing is both promoting domestic AI champions and tightening oversight of cross-border data and technology flows.

Hong Kong has become a more active venue for Chinese AI and technology listings. Zhipu and MiniMax have found success in recent months with Hong Kong listings, according to the reports, providing a template for other AI companies seeking public capital. A Hong Kong listing could give Manus access to investors who understand Chinese technology companies, while also offering an international market that is familiar to global funds.

The joint venture idea may be designed to address several issues at once. It could clarify control and ownership after the unwinding of the Meta deal. It could create a structure that satisfies Chinese regulators. And it could create a path to public markets without requiring the company to abandon its international customer base. The details remain unclear, including which assets would sit inside the joint venture and how existing investors would be treated.

Meta separation and internal AI plans

Meta has completed operational separation from Manus and has halted data-sharing with the start-up, according to reports. The separation is a necessary step after an acquisition is ordered unwound. It can involve disentangling products, systems, employee access and commercial agreements. For Manus, the priority is to ensure continuity for customers and to reassure them that their data is not caught up in the ownership change.

Meta had reportedly been planning to use Manus-like technology in an internal initiative to use AI to replace human workers. That plan reflects a broader surge of interest among large companies in AI agents that can perform routine knowledge work. It also raises labour and reputational questions. Companies are under pressure to show that AI is improving productivity, but they face scrutiny when the technology is explicitly linked to job cuts.

Emily Dalton Smith, a key executive involved with applying the Manus-like technology to Meta’s internal AI agents, reportedly said in an internal memo to staff earlier this week that she planned to leave the company. Her departure adds to the sense of transition around the project. It also suggests that Meta’s internal AI agent work may be reorganised after the unwinding of the Manus deal.

The reports did not specify a timetable for the buyback or say whether the $2 billion price would be adjusted for Manus’s revenue growth. They also did not detail how a China-incorporated joint venture would affect existing customers or investors.

Source: Silicon UK News