Key facts

• Early investors in Manus are preparing to buy the AI startup back from Meta for the $2 billion the social media company originally paid.
• The plan follows an April order by the Chinese government for Meta to unwind the acquisition.
• HSG, ZhenFund, Tencent and other early investors are participating; HSG and ZhenFund are considering fresh capital.
• Benchmark is reportedly not participating in the buyback.
• Manus annualised revenue has risen from about $100 million at the time of the deal to an estimated $400 million to $500 million.
• The company is considering a China-incorporated joint venture that could lead to a Hong Kong listing.
• Meta has completed operational separation from Manus and halted data-sharing with the startup.
• A key Meta executive involved in applying Manus-like technology to internal AI agents plans to leave.

A deal forced into reverse

The early backers of Manus are preparing to reacquire the artificial intelligence startup from Facebook parent Meta for the $2 billion that Meta originally paid, according to reports, setting up an unusual reversal of a cross-border technology deal that has become entangled in regulatory scrutiny. The move would return Manus to a group of investors that backed the company before the acquisition and would mark a rare case of a buyer unwinding a completed AI deal under government pressure.

The buyback plan follows an April order from the Chinese government requiring Meta to unwind the acquisition. The reported move would return Manus to a group of investors that backed the company before the deal, including HSG, ZhenFund, Tencent and other early shareholders. HSG and ZhenFund are considering using fresh capital to finance the purchase, according to the reports, while Benchmark, another early investor, is reportedly not taking part.

Manus, which was founded in China and is based in Singapore, has grown sharply since the December transaction. Its annualised revenue run rate has climbed from about $100 million at the time of the acquisition to between $400 million and $500 million now, according to the reports. That growth has changed the calculus for both the startup and its investors, making the original $2 billion price look increasingly modest relative to current revenue.

Investor lineup and fresh capital

The investor group behind the proposed buyback reflects Manus's early support base. HSG and ZhenFund are among the venture investors that backed the company before Meta stepped in, and Tencent, the Chinese internet giant, is also participating in the re-acquisition effort. The involvement of Tencent is notable because it shows continued interest from a major strategic investor in the Chinese technology ecosystem, even as the startup navigates a complex cross-border ownership structure.

The reports said HSG and ZhenFund are considering using fresh capital to fund their share of the buyback. That detail suggests the early backers are not simply recycling proceeds from the original sale but are prepared to commit new money to regain control of Manus. For venture investors, buying back a fast-growing AI company at the same headline price paid by a larger acquirer can be attractive if the business has expanded significantly in the interim.

Benchmark, another early investor in Manus, is reportedly not participating in the buyback. The absence of one early backer may be a matter of fund strategy, portfolio construction or differing views on the company's next phase. It also means the ownership mix after any buyback could differ from the pre-acquisition cap table, potentially giving the participating investors greater influence over Manus's future direction.

Revenue growth changes the valuation math

The reported surge in Manus's revenue is central to the buyback story. At the time of the December deal, the company's annualised revenue run rate was about $100 million. The reported range of $400 million to $500 million now implies that the business has grown several times over in a relatively short period, even as its ownership has been in flux.

For Meta, the original $2 billion price may have looked like a strategic bet on AI agent technology. For the early backers, the same price now represents an opportunity to regain a company whose revenue base is much larger than it was at the time of the sale. The buyback at the original price could therefore be viewed as a favorable outcome for the investors if the growth trajectory continues, though it also raises questions about how the company's value was assessed during the original transaction.

Annualised revenue run rates are not the same as audited annual revenue, and they can be volatile for fast-growing AI companies. Still, the reported increase from $100 million to $400 million or $500 million is substantial enough to reshape negotiations over ownership, governance and future financing. It also helps explain why the early backers might be willing to use fresh capital rather than simply walking away from the asset.

A China joint venture and Hong Kong listing path

Manus is considering changing its structure to become a joint venture incorporated in China, according to the reports. Such a structure could help the company address regulatory concerns about foreign ownership and control of sensitive AI technology. It could also create a clearer separation between domestic Chinese operations and international business activities.

A China-incorporated joint venture could pave the way for a Hong Kong market listing. Hong Kong has become an increasingly important venue for Chinese technology and AI companies seeking access to public markets while remaining closer to their home regulatory environment. The reports noted that Chinese AI startups including Zhipu and MiniMax have found success in recent months with Hong Kong listings, which may have encouraged Manus to explore a similar path.

A listing would give Manus access to public capital and a broader investor base, but it would also bring additional disclosure requirements and governance scrutiny. The joint venture structure, if pursued, would need to be carefully designed to satisfy Chinese regulators, existing investors and any future public shareholders. The reports described the structure as under consideration rather than finalized, leaving open questions about timing, ownership percentages and which assets would sit inside the joint venture.

Operational separation and data-sharing halt

Meta has already completed operational separation from Manus and has halted data-sharing with the startup, according to reports. That separation is a significant step in unwinding the acquisition because it reduces the integration between the two companies and limits the flow of information and technology.

Operational separation can be complex in AI deals, where data, models and engineering teams are often tightly connected. Halting data-sharing may be intended to address regulatory concerns about cross-border data flows and the control of sensitive information. It also means Manus must operate more independently, relying on its own systems, infrastructure and governance arrangements.

The separation does not by itself complete a sale, but it creates a cleaner starting point for a buyback. If the early investors do reacquire the company, they would inherit a business that has already been partly disentangled from Meta. That could simplify the transition, although it may also mean Manus has had to rebuild certain capabilities or relationships that were previously supported by the larger acquirer.

Meta's internal AI ambitions

Before the unwind, Meta had reportedly been planning to use Manus-like technology in an internal initiative to use AI to replace human workers. The plan reflects a broader push across the technology industry to deploy AI agents and automation tools to reduce costs and improve efficiency.

Using AI to replace human workers is a sensitive subject, particularly at a company of Meta's scale. Such initiatives can affect thousands of roles and raise questions about labor practices, retraining and the social impact of automation. The reported plan also shows why Manus's technology was strategically valuable to Meta, even beyond the startup's standalone revenue.

The internal initiative was reportedly linked to Meta's efforts to build AI agents for use inside the company. Those agents could handle routine tasks, support internal workflows or automate parts of the work currently done by employees. The technology behind Manus may have been seen as a useful building block for those efforts, which makes the forced unwind more consequential for Meta's internal AI roadmap.

Executive departure adds uncertainty

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 planned departure adds another layer of uncertainty to Meta's internal AI efforts at a time when the company is already separating from Manus.

The timing of the memo is notable because it came as Meta was completing operational separation and halting data-sharing with the startup. A leadership change in the middle of an AI initiative can slow progress, shift priorities or prompt a reassessment of how the technology will be used. It also raises questions about who will oversee the internal agent program going forward.

Smith's departure was disclosed in an internal memo to staff earlier this week, according to reports. The memo did not change the fact that Meta has been pursuing AI agents for internal use, but it highlighted the challenges of executing on ambitious automation plans while unwinding a major acquisition.

Source: Silicon UK News