Tencent to Lead $2 Billion Manus Buyback After Beijing Reverses Meta

Tencent is set to become Manus’ largest shareholder after the Chinese gaming and internet company joined forces with the AI agent startup’s early backers to buy it back from Meta at no less than $2 billion. The buyback, first reported by the Financial Times earlier on Friday, follows Beijing’s order to Meta in April to unwind its December 2025 acquisition of Manus, an agentic AI developer founded in Wuhan and Beijing by Xiao Hong and now headquartered in Singapore. Two people with knowledge of the matter told Reuters that Tencent, ZhenFund and HSG are pursuing a repurchase at the same price Meta paid. A third person briefed on the talks confirmed the same terms. Tencent, Manus, Meta and the two firms did not immediately respond to requests for comment.

Tencent, ZhenFund and HSG Step In

Tencent, ZhenFund and HSG are negotiating to repurchase Manus from Meta at no less than $2 billion, two people with knowledge of the matter told Reuters on Friday. The Financial Times first reported Tencent’s plan to take the largest share earlier in the day. The buyers would match the price Meta paid when it announced the Manus acquisition in December 2025.

The structure is still being negotiated, but the people briefed said all three original Chinese investors have agreed to participate. ZhenFund and HSG, the venture backers behind Manus’s parent company Butterfly Effect, are weighing extra capital on top of their existing stakes to fund the deal. Benchmark, the California firm that led Manus’s April 2025 Series B at about a $500 million valuation, is not expected to join. A third person briefed on the same terms confirmed the same price. The Chinese tech giant has been an active AI deal-maker this year, including taking part in Tencent’s first $18B-valued external funding bet on Kling AI, which closed earlier in 2026.

Manus said in December 2025 that it would keep operating out of Singapore, where it had relocated its headquarters from Wuhan and Beijing mid-last year. Meta did not respond on Friday to requests for confirmation of the Tencent talks, putting the startup back in the hands that owned it before Meta announced its purchase.

Why Beijing Ordered Meta to Unwind the Deal

On April 27, 2026, China’s National Development and Reform Commission ordered Meta to abandon its December 2025 acquisition of Manus, requiring “the parties involved to withdraw the acquisition transaction.” The directive marked the first time Chinese regulators had forced the unwinding of an already-closed purchase of a foreign-targeted AI company. Reuters and the New York Times reported the move, citing unspecified national-security and foreign-investment rules. It capped a probe that had begun in January 2026 when the Ministry of Commerce announced an “evaluative investigation” of the deal.

Beijing’s interest predated the formal order. In March 2026, Chinese authorities summoned Manus co-founders Xiao Hong and chief scientist Ji Yichao to Beijing and barred both from leaving the country, leaving Manus’s technical leadership unable to relocate to Meta’s Singapore offices.

The NDRC framed the order as enforcement of rules around export controls, technology transfer, and foreign investment in strategically sensitive sectors. Reversals of completed transactions are uncommon from Chinese regulators, making the directive an unusually aggressive intervention in the AI sector specifically. Meta’s standing reply, delivered through a spokesperson to the BBC, echoed the line the company had held throughout the year-long review. Meta declined to characterize the order as final.

The spokesperson made the company’s posture plain:

the transaction complied fully with applicable law. We anticipate an appropriate resolution to the inquiry.

Meta spokesperson, statement to the BBC, April 27, 2026.

Meta’s $2 Billion Forced Exit

Meta went public with its Manus purchase in late December 2025, telling reporters the Singapore-headquartered agent would be folded into Meta AI. By mid-June 2026, those ties were being severed inside the building.

On June 13, 2026, Meta cut Manus and its staff off from the parent’s internal systems. A Bloomberg review of an internal Meta memo found the language the company used was ‘sunsetting.’ Meta ordered employees to migrate active projects to Meta’s own infrastructure rather than initiate anything new on the Manus platform. Meta declined to comment beyond the memo’s text. The data firewall is the most concrete step yet toward unwinding the deal.

• $2 billion: the price Meta announced for Manus in December 2025
• April 27, 2026: the NDRC’s directive to withdraw the acquisition transaction
• March 2026: co-founders Xiao Hong and Ji Yichao barred from leaving China
• June 13, 2026: Meta halts data sharing with Manus and orders teams to wind down internal Manus projects
• June 15, 2026: Meta formally announces it is cutting ties with Manus

On June 15, 2026, Meta made the split official, blaming the Chinese regulator’s block. The company had already paid out Benchmark, the US lead investor, from the original deal proceeds, the American Bazaar reported. Tencent, ZhenFund and HSG, the three earlier Chinese investors, indicated they would cooperate with the unwinding process, the Wall Street Journal reported. Manus continued shipping features through the year, including integrations with Similarweb and Shopify, even as the ownership question dragged on.

Manus’s Founders Plan the Buyback Themselves

The path back to Chinese control runs through a $1 billion fundraise the three founders are leading themselves. Xiao Hong, Ji Yichao and Zhang Tao are in early-stage discussions with outside investors to reclaim the company at the same valuation Meta paid. The founders are prepared to contribute personal capital to bridge any shortfall, multiple people briefed on the talks told Reuters and The Information. The round would clear Meta out and put the founders back in charge of a company they had effectively handed over six months earlier. HSG and ZhenFund are weighing additional capital alongside their existing stakes in the deal.

Once the buyback closes, Manus is expected to be reorganized as a Chinese joint venture. The new structure would smooth a path toward a Hong Kong listing, mirroring the route other Chinese AI names have taken to public markets this year.

The Information reported that Hong Kong has been the venue of choice for Chinese AI listings this year, with multiple Chinese AI founders testing the city’s pipeline after the Manus block. For Manus, the listing would create regulatory clarity on both sides of the Pacific at the same time. The Information also reported Manus’s annualized revenue run rate had climbed between $400 million and $500 million by June 2026.

Manus’s pivot back toward China would unwind most of what the company built in 2025 to look like a Singapore firm. In mid-2025, the company shut down its Chinese-language social media accounts, blocked access from mainland China and shelved a planned Chinese version of its product that had been a partnership with Alibaba’s Qwen team. The Qwen version had been intended to be a co-marketed product with Alibaba’s model team. A return to a Chinese joint venture is a partial reversal of that posture, even as Beijing has moved separately to Beijing’s draft limits on shipping top-tier Chinese AI models overseas.

The ‘Singapore Washing’ Playbook Just Closed

The NDRC’s order makes a structural point clearer than the sale itself: reincorporating an AI company in Singapore no longer cuts its ties to Beijing. The directive stated plainly that offshore incorporation does not shield a deal from China’s authority when the technology and the talent originated on the mainland. Critics had called this exact arrangement ‘Singapore washing’ for years, and the Manus episode is the highest-profile test of the structure so far. The same week the order landed, Chinese authorities expanded travel restrictions to researchers and executives at private firms, requiring government sign-off before they head abroad. Top AI companies including Moonshot AI, StepFun and ByteDance now need state approval before accepting US investment.

Manus’s founders had spent the eighteen months before the Meta deal building the Singapore narrative. They took meetings with Chinese local governments offering to invest in 2025 and declined, fearing that domestic state ties would invite Western scrutiny. They pulled out of mainland social platforms and abandoned the Alibaba Qwen joint product, and none of those moves protected them when Beijing decided to look at the deal.

For would-be Chinese AI founders with global ambitions, the takeaway is hard: a Cayman incorporation and a Singapore mailing address are not a substitute for Beijing’s good graces. The exit door has narrowed for the next cohort of would-be unicorns, and the lawyers structuring red-chip listings now warn that the NDRC has the tools to interfere with their plans too. The Meta side is also dealing with the aftermath. Read alongside the AI reorganization Meta’s own CTO has called ‘atrocious’, the ‘sunsetting’ memo on Manus reads as part of a wider retreat inside the company’s AI unit.

Tencent’s Path to Owning Manus

Bankers and lawyers quoted by the Financial Times said the NDRC has the power to block some red-chip listings out of China, reflecting the regulator’s expanding reach into how Chinese-origin companies tap overseas capital. Hong Kong’s surge of Chinese AI listings this year has shown what an alternative looks like. Manus’s reorganized Chinese joint venture would slot into that pipeline, assuming the buyback closes on the terms the three investors are now negotiating.

For Meta, the next visible step is the formal acknowledgement of the unwound acquisition in a regulatory filing or quarterly disclosure. For Tencent, the next visible step is whether the talks convert into a binding offer. The deal’s logic still sits with the three groups that owned Manus before Meta did: Tencent, ZhenFund and HSG. The founders, who built Manus around a Singapore-facing product over the past 18 months, are now moving in the opposite direction. The Information reported that the founders’ side is moving toward the same price as the floor it is willing to accept from Meta.

Frequently Asked Questions

Why is Beijing unwinding Meta’s Manus deal?

China’s National Development and Reform Commission ordered Meta to withdraw the acquisition in April 2026, citing national-security and foreign-investment rules covering export-controlled and strategically sensitive technology. The order came after a months-long probe that began in January 2026.

How much will the Manus buyback cost?

The deal is being negotiated at no less than $2 billion, the same price Meta paid when it announced the Manus acquisition in December 2025. Tencent, ZhenFund and HSG are the named buyers, with the three founders raising an additional $1 billion from outside investors.

Who founded Manus?

Manus was built by Xiao Hong, the CEO, Ji Yichao, the chief scientist known as Peak, and Zhang Tao, the chief product officer. All three remain in leadership under the buyback plan. Their parent company is Butterfly Effect, registered in Beijing and Wuhan and now operated from Singapore.

Will Manus list in Hong Kong?

The buyback is being structured as the prelude to a Chinese joint venture that could list in Hong Kong. Hong Kong has been the venue of choice for Chinese AI listings this year.

What did Meta say about the order?

A Meta spokesperson told the BBC in April 2026 that the transaction ‘complied fully with applicable law’ and that the company anticipated ‘an appropriate resolution to the inquiry.’ Meta confirmed in June 2026 that it was cutting ties with Manus.