Tencent is leading a group of Chinese investors buying back AI agent startup Manus from Meta, unwinding a $2 billion deal that Beijing refused to let stand.
Eight months ago Meta announced it was folding a promising Chinese AI agent startup into its stable. Now it's watching the same company walk back out the door, at the exact price it paid to bring it in. According to Bloomberg, which cited a Financial Times report published July 10, Tencent is in talks to become the largest shareholder in Manus, joining ZhenFund and HSG, formerly Sequoia Capital China, in a consortium working to reverse Meta's acquisition at its original $2 billion valuation.
Manus builds autonomous AI agents, tools designed to actually carry out multistep tasks rather than just answer a prompt and stop. Book a flight. Research a competitor. Assemble a slide deck. Founded in 2022 as Butterfly Effect by entrepreneur Xiao Hong, the company is headquartered in Singapore but built by a Chinese team, with early funding from Tencent, ZhenFund and HSG going back to a 2023 seed round and a 2024 Series A.
That Chinese lineage is exactly what killed the deal.
Meta announced its purchase of Manus in December 2025, hoping to strengthen its position in the agentic AI race against OpenAI and Google. China's National Development and Reform Commission had other plans. In April, the NDRC ordered Meta to unwind the transaction, citing national security concerns over foreign ownership of an AI company with Chinese roots, following a months-long regulatory review that reportedly began almost as soon as the deal was announced. Manus being incorporated in Singapore, it turns out, offered no real shelter. As CNBC reported in June, Beijing's message was blunt: companies with sufficiently Chinese origins fall under its regulatory reach no matter where they're domiciled on paper.
Meta didn't fight it for long. By June, TechCrunch reported the company had begun operationally separating from Manus, cutting the startup's access to Meta's internal data systems and barring its own employees from using Manus tools for internal work.
The buyback consortium looks a lot like Manus's investor base before Meta ever showed up, with one exception. Benchmark, the Silicon Valley firm that led Manus's $75 million Series B in April 2025 at a roughly $500 million valuation, is reportedly sitting this one out. Benchmark, like Meta, already collected its proceeds from the original sale and isn't putting money back in. Tencent, ZhenFund and HSG are stepping up instead, and the group is said to be raising around $1 billion to fund the repurchase. Tencent will end up the largest single shareholder, according to the FT report, though it's expected to remain a minority holder overall.
Meta, for its part, looks likely to walk away close to whole. Recovering the full $2 billion it paid, with none of the reputational cost of a drawn-out dispute, is not a bad outcome for a company that lost a bet on Chinese regulatory tolerance. It's a cleaner exit than most acquisitions gone wrong ever get.
There's an irony sitting underneath the numbers. During its brief six months inside Meta, Manus's annualized revenue reportedly climbed from around $100 million to somewhere between $400 million and $500 million, helped along by Meta's traffic and advertising channels, according to figures reported by 36Kr. Tencent and its partners are buying back a business that's grown several times over since they last held it, at the same price they'd have paid before that growth happened.
For Meta, this is now a cautionary case study rather than a live deal. Any US tech company eyeing a Chinese-founded AI startup, wherever it's incorporated, now has a concrete example of how fast Beijing can force a reversal once regulators decide sovereignty over frontier AI technology matters more than deal terms. Frankly, the Singapore incorporation that was supposed to provide cover turned out to be irrelevant the moment national security language entered the conversation.
For Tencent, the timing works in its favor. It gets to fold a fast-growing agentic AI product back into its own ecosystem just as the race to build autonomous agents, rather than chatbots, becomes the industry's next real battleground. Whether Manus can keep growing at the pace it did under Meta's traffic funnel, without Meta's traffic funnel, is the question its new majority-adjacent owner will have to answer next.
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