Xiao Hong (@Red_Xiao_), the founder behind Manus, is navigating the breakup of Meta's acquisition of his AI agent company after Chinese regulators blocked the deal. Manus says it will soon operate independently. As of August 11, however, Meta remained associated with Manus while reportedly separating it from internal systems and unwinding the acquisition; no completed transfer to the founders had been confirmed. (Tom's Hardware)
The separation creates an immediate problem for some Manus customers. In an August 11 notice, Manus said affected users must back up data generated on or after December 29, 2025, before Manus deletes it during a two-day window later this month. The notice ties the deletion directly to Manus' separation from Meta (@Meta) and regulatory requirements in certain jurisdictions. (Manus)
The operational disruption is the clearest public evidence yet that the unwind reaches beyond ownership paperwork. Manus has already built a backup and restoration tool, and affected accounts will temporarily lose access while their data is removed and restored. Manus said the measure was unrelated to a breach or security incident.
The legal and economic shape of Manus after Meta's unwind remains undefined. Manus said it will "soon" resume independent operations without identifying its post-separation owner, the transaction used to reverse Meta's acquisition, or a closing date. Manus also has not disclosed which investors would retain a stake or how a newly independent Manus would be financed.
The founders behind Manus
Xiao built Manus through Butterfly Effect, which he founded in 2022 after spending years creating software for business users. Beijing Daily reported that he studied software engineering at Huazhong University of Science and Technology and, after graduating in 2015, founded Wuhan Nightingale Technology. Its WeChat tools, Yiban Assistant and Weiban Assistant, served more than 2 million business users, according to the publication. (Beijing Daily)
That history explains Manus' product strategy. Xiao has repeatedly built applications on top of existing platforms rather than owning the foundational infrastructure underneath them. Butterfly Effect first released Monica, an AI browser assistant that brought multiple language models into a consumer interface. Manus extended the same approach into a cloud computer that can research, edit files, write code and assemble finished work from a natural-language request.
Manus' founding team paired Xiao's distribution instincts with Yichao "Peak" Ji (@peakji), Butterfly Effect's co-founder and chief scientist. Ji developed an iPhone browser while he was a student and later founded Peak Labs, which worked on information extraction and search. Co-founder Tao Zhang (@hidecloud) previously held product roles at ByteDance and Light-Year Beyond, according to Beijing Daily. (Beijing Daily)
The founders launched Manus publicly on March 6, 2025, around a simple product thesis: language models could become useful workers when paired with planning, tools and persistent cloud computers. The architecture allowed a user to leave while Manus continued a task remotely, then return to a completed presentation, analysis or website. (Beijing Daily)
A fast acquisition meets a regulatory reversal
Meta announced its acquisition of Manus on December 29, 2025. The companies did not publish financial terms. Earlier reporting valued the acquisition at approximately $2 billion, while Axios put the potential package at about $2.5 billion when employee retention compensation was included. Manus had raised $75 million from Benchmark earlier in 2025 at a reported $500 million post-money valuation. (Reuters)
The price reflected Manus' reported commercial growth as much as its technology. In December, Manus said it had passed $100 million in annual recurring revenue eight months after launch and reached a $125 million total revenue run rate. It also claimed more than 147 trillion processed tokens and 80 million created virtual computers. Those were Manus-reported figures from before the separation, and the August notice offers no updated revenue, retention or usage figures. (Manus)
Chinese regulators blocked the acquisition in April after Beijing demanded that the deal be reversed, according to the Associated Press. Meta had previously said Manus would have no continuing Chinese ownership and would end operations in China, while Manus had moved its headquarters and much of its team to Singapore. (Associated Press)
By June, Meta had cut Manus off from internal systems and halted data sharing as the companies worked toward a full separation, TechCrunch reported. Xiao, Ji and Zhang had also held preliminary discussions about raising approximately $1 billion from outside investors to buy back the company. No completed buyback or return of founder control has been confirmed. The August 11 customer notice shows that the unwind has progressed into a data migration, although it does not establish how Manus will be financed or governed. (TechCrunch)
What affected Manus users must do
Manus said it will tell affected users through email and in-app notifications. People who registered through an Apple ID or Facebook account should check the application because Manus may not have an email address for them.
The backup window closes at 7:59 p.m. EDT on August 22, which is 7:59 a.m. Singapore time on August 23. Manus will delete covered data from August 23 through August 24, Singapore time. Restoration opens at 8 p.m. EDT on August 24, or 8 a.m. Singapore time on August 25. Manus recommends running another backup if a user creates new task data after completing an earlier one. (Manus)
Affected customers will not be charged during the backup period and will receive what Manus describes as welcome-back bonuses after restoring their accounts. Unaffected users can continue working without taking action. Manus said its data will remain stored in the United States and Singapore after the separation. (Manus)
For Xiao and his co-founders, control of Manus remains unresolved. Manus now has to carry out the deletion and restoration process while clarifying who will own and finance it after Meta's unwind. Affected users have less than two weeks from the notice to preserve covered task data before deletion begins.