Inside Meta Platforms, the internal memo said it plainly: Manus is being “sunset.” Staff were told to migrate existing Manus projects onto Meta’s own systems and not to begin new work on the AI platform.
The instruction, viewed by Bloomberg News, is part of an operational separation that Meta has now completed. The owner of Facebook and Instagram has halted data sharing with Manus, the Chinese-founded agentic AI service it agreed to acquire for $2 billion in December, according to people familiar with the matter. Meta barred Manus and its employees from accessing the company’s internal data systems at the start of this month. Meta employees, in turn, can no longer use Manus tools for internal projects, the people said.
The split is the most concrete step yet toward unwinding a deal that Beijing ordered dissolved on national security grounds roughly two months ago. China’s demand was unprecedented: a foreign government telling an American technology company to reverse a completed acquisition. The case has become a test of how far Beijing will go to block the transfer of strategic technology, and how far Washington will go to resist.
Manus was founded in China and relocated its headquarters and core teams to Singapore last year, ahead of Meta’s takeover. The deal closed after a months-long probe into technology export controls, and it quickly drew scrutiny on both sides of the Pacific. Beijing’s April order to divest, delivered through the regulatory machinery that governs outbound transfers of sensitive assets, caught the companies mid-integration.
People familiar with the situation said Meta has effectively erected a firewall between itself and Manus. The two companies no longer share data, and the operational ties that made the acquisition valuable in the first place are being cut one by one. Manus’s founders are exploring ways to satisfy Beijing’s demand, including raising about $1 billion to fund a buyback of the company, people familiar with the matter said. A full separation, with ownership transferred, would still take months to complete.
The split is not total, at least not yet. Manus’s consumer product still functions, and its users this week could still choose to connect Meta’s Ads Manager, Instagram, Gmail and GitHub. The company has added integrations with Similarweb and Shopify. The parts of Manus that Meta most wanted, however, are being pulled apart deliberately: the engineering teams that had begun working inside Meta’s infrastructure, and the data flows that would have let Manus’s agents operate on Meta’s systems.
For Meta, the episode is a costly lesson in cross-border M&A. The company paid $2 billion for a startup whose core appeal was a working AI agent, then discovered that the asset carried political liabilities that no contract could price. For the broader industry, the split is a preview of the friction ahead. U.S. technology companies have spent years acquiring or partnering with Chinese-founded AI startups; governments on both sides are now deciding which of those relationships are acceptable.
The political context has hardened since the acquisition was announced. Beijing has tightened technology export controls on cross-border deals involving strategic assets, and the U.S.-China technology rivalry has widened into a contest over talent, hardware and data. The Manus deal was caught at the intersection of both: a U.S. acquirer, a Chinese-founded product, and a regulator in each country asserting jurisdiction over the same assets.
Analysts said the Manus case could shape how other companies structure AI deals involving Chinese talent and Chinese-origin technology. “This is the first big test of whether an American acquirer can hold onto a Chinese AI asset against Beijing’s wishes,” said one technology analyst. “The answer so far is no.”
The unwinding also carries a practical message for Meta’s own AI plans. The company is spending heavily on its own agentic AI research, and the Manus teams had been expected to accelerate that work. With the separation underway, Meta’s in-house projects will proceed without them.
People familiar with the matter said the next steps depend on the buyback talks. If Manus’s founders raise the roughly $1 billion they are seeking, the deal could be reversed cleanly, with Meta recovering most of its money and Manus re-emerging as an independent, Singapore-based company. If the financing falls through, the separation could become a messy divestiture with regulators on both continents watching.
The separation also carries implications for Meta’s AI strategy beyond the deal itself. Manus was meant to accelerate Meta’s work on agentic AI, the category of software that acts on users’ behalf, and its tools had been woven into internal projects. With the split complete, Meta’s own teams are rebuilding that capability from scratch, a delay that competitors are unlikely to extend sympathy for. The company has not said how the unwind will affect its product roadmap, and people familiar with the matter said the details are still being worked out with the parties in both capitals.
Either way, the era of quiet integration is over. Meta has built the firewall, cut the data flows and told its employees to stop using the product. The formal dissolution is now a matter of when, not whether.
