Manus AI co-founders Xiao Hong, Ji Yichao, and Zhang Tao are exploring raising approximately $1 billion from outside investors to buy back the agentic AI startup from Meta, Bloomberg reported on Wednesday. The raise would fund the reversal of Meta’s $2 billion-plus acquisition, which China’s National Development and Reform Commission ordered unwound in late April.
The NDRC cited possible violations of Chinese investment rules and concerns about the outflow of strategically important AI technology, according to The Next Web. The decision marks the first time a consummated deal has been ordered reversed under China’s Foreign Investment Security Review Measures, according to O’Melveny’s legal analysis of the case.
The Deal and the Block
Meta closed the Manus acquisition in December 2025. By the time Beijing intervened, roughly 100 Manus employees had already moved into Meta’s Singapore offices, and asset integration was underway, according to WinBuzzer. The unwind requires separating staff, reporting lines, product plans, and data rather than simply canceling a term sheet.
Manus was founded in China and relocated its headquarters and core team to Singapore last year after a US-led venture round. The company reincorporated as Singapore-based Butterfly Effect. Beijing’s NDRC has taken the position that the Chinese-origin status of the underlying technology and the team’s prior Chinese employment history still bring the company within the scope of Chinese investment-review rules, The Next Web reported.
Why the Money Is Complicated
Unlike a standard growth round, the capital would buy Meta’s stake back, fund the data removal and separation work the unwind requires, and capitalize the standalone Manus business through the next operating year, according to Bloomberg. If the raise lands, it would value Manus materially above the $2 billion Meta paid in December.
No confirmed investor list, final price, or closing timetable has surfaced. WinBuzzer reported that personal capital from some founders may also be part of the structure. Meta has been preparing for the unwind under a regulator-set deadline of weeks rather than months.
Manus reportedly hit $100 million-plus ARR within eight months of launching its first general-purpose AI agent. The December valuation implied a roughly 4x markup over the $500 million valuation set in the April 2025 round led by Benchmark, per The Next Web.
The Precedent for Cross-Border AI Deals
O’Melveny’s analysis flagged the precedent as material for any US-led AI deal involving a target company with Chinese roots, regardless of where the target is currently incorporated. The firm concluded that Singaporean redomiciling is “no longer a clean way to neutralize Chinese investment-review risk.”
The timing aligns with broader strategic competition. Washington has tightened outbound investment rules and expanded semiconductor export controls targeting China’s AI capabilities. Beijing has doubled down on indigenous AI innovation in its latest Five-Year Plan. The NDRC’s intervention is part of a pattern where both governments deploy regulatory tools to secure advantages in the AI race, O’Melveny noted.
For cross-border deal lawyers, the practical takeaway is that Chinese regulatory reach now extends to companies with Chinese-origin technology and Chinese-trained personnel, even after full corporate relocation to a third jurisdiction.
The Singapore Context
OpenAI announced a $235 million Singapore applied-AI lab the same week Manus’s raise was reported, underscoring the city-state’s position as the Asia-Pacific AI hub of choice for Western-aligned companies. Manus, if it completes the buyback, would land on the standalone Singapore side with a balance sheet large enough to compete independently in the agentic AI category.
Neither Manus nor Meta have publicly detailed the proposed financing structure or offered an on-record explanation of how the reversal would be funded. The next visible signal will be either a formal Manus funding announcement or a Meta-side disclosure of the unwind’s economic terms.