Manus Backers Move to Reverse Meta Deal

Early investors in Manus are assembling a buyback that would return the artificial intelligence start-up to its original backers for the same $2 billion price Meta paid, according to reports. The move follows an order from the Chinese government in April requiring Meta to unwind the acquisition. The transaction would mark an unusual reversal for a high-profile AI deal and would restore Manus to a mostly early-stage investor base at a moment when its revenue is rising sharply.

People familiar with the plans say HSG, ZhenFund and Tencent are among the early Manus investors participating in the buyback. HSG and ZhenFund are considering using fresh capital to fund their portions, according to the reports. Benchmark, another early investor, is reportedly not taking part. The structure and timing of the buyback remain subject to negotiation, but the reported price is unchanged from the original acquisition. The talks underline how regulatory pressure can reshape ownership in the global AI sector even after a deal has closed.

Key Facts at a Glance

• Early Manus backers are preparing to buy the company back from Meta for $2 billion.
• HSG, ZhenFund, Tencent and other early investors are participating.
• HSG and ZhenFund may use fresh capital for the buyback.
• Benchmark is reportedly not participating.
• Manus annualized revenue run rate has risen from $100 million at the time of the deal to $400 million-$500 million now.
• Manus is considering a China-incorporated joint venture structure that could lead to a Hong Kong listing.
• Meta has completed operational separation from Manus and halted data-sharing.

The reported buyback is significant because it would return Manus to investors who backed the company before Meta’s acquisition. It would also reset the ownership of a start-up whose technology has become more valuable in the eyes of customers and investors. Manus is a general-purpose AI agent designed to carry out multi-step tasks with limited human supervision. Such agents can browse, research, organize information and complete workflows that traditionally require several software tools or human workers. The product category has attracted intense interest from enterprises looking to automate routine knowledge work.

Why the Revenue Surge Matters

The reported increase in Manus’s annualized revenue run rate is central to the buyback story. At the time of the acquisition, the company’s run rate was about $100 million. That figure has reportedly risen to between $400 million and $500 million. The jump suggests that demand for AI agents has grown faster than many observers expected, even as competition in the sector has intensified. A higher revenue base makes the original $2 billion price look more attractive to buyers and could give the returning investors a stronger platform for future growth.

Annualized revenue run rate is not the same as audited annual revenue. It is a snapshot that takes a recent period’s revenue and extrapolates it over a full year. The metric can be volatile, especially for fast-growing software companies that sign large contracts at uneven intervals. Still, the reported range indicates that Manus has scaled commercially since the deal. For investors considering a buyback, that trajectory may justify taking on the risk and complexity of reversing a cross-border transaction.

The buyback also comes as AI companies face rising costs for computing power, talent and data. Building and running AI agents requires significant infrastructure, and companies must continually improve models to stay competitive. Manus would need to invest in product development, security and compliance if it returns to independent ownership. Its investors would likely focus on expanding enterprise sales and proving that AI agents can deliver reliable results at scale.

China Incorporation and Hong Kong Listing Path

Manus was founded in China and is based in Singapore. According to reports, the company is considering changing its structure to become a joint venture incorporated in China. Such a change could align the company more closely with Chinese regulatory expectations and potentially open the door to a Hong Kong market listing. Hong Kong has become an important venue for Chinese AI and technology companies seeking access to international capital while remaining close to mainland markets.

A Hong Kong listing would not be immediate. Companies must meet listing rules, disclose financial information and satisfy regulators and investors. But the possibility adds another layer to the buyback. Returning Manus to early investors could simplify its ownership structure and make it easier to pursue a new corporate form. A China-incorporated joint venture might also help the company navigate the regulatory environment that led to the unwinding order.

Recent Hong Kong listings by Chinese AI start-ups have drawn attention. Companies including Zhipu and MiniMax have found success in the market in recent months, according to reports. Their experience could provide a template for Manus if it decides to pursue a listing. Investors often look for AI companies with strong revenue growth, clear paths to profitability and defensible technology. Manus would need to demonstrate all three as it considers a public-market future.

Meta’s Separation and Internal AI Plans

Meta has reportedly completed its operational separation from Manus and halted data-sharing with the start-up. The separation is a crucial step in unwinding the acquisition. It means the two companies are no longer sharing the operational ties that would normally exist after a merger. The process can be complex, especially when technology, employees and data have been integrated. Completing separation reduces the risk of further regulatory conflict and allows both sides to move forward independently.

Before the unwind, Meta had reportedly planned to use Manus-like technology in an internal initiative to apply AI to work currently done by humans. The idea reflects a broader push across the technology industry to deploy AI agents inside large organizations. Such agents can handle repetitive tasks, summarize information and coordinate workflows. Meta’s interest in the technology shows that Manus had strategic value beyond its standalone revenue.

Emily Dalton Smith, a key executive involved with applying Manus-like technology to Meta’s internal AI agents, reportedly told staff in an internal memo earlier this week that she planned to leave the company. Her departure adds uncertainty to Meta’s internal AI agent efforts. It also highlights how personnel and projects can be affected when acquisitions are unwound. Companies often lose momentum when key leaders leave, particularly in fast-moving AI initiatives where institutional knowledge is concentrated in a small group.

The separation does not necessarily mean Meta will abandon AI agents. Large technology companies are investing heavily in agentic AI, and Meta has extensive resources to develop its own systems. But the reported unwind removes a ready-made product and team that Meta had sought to acquire. For Manus, independence could allow it to pursue customers and partnerships without the constraints of being owned by a U.S. technology giant.

Investor Dynamics and the Road Ahead

The buyback group includes some of Manus’s earliest and most influential backers. HSG and ZhenFund are considering fresh capital, which suggests that they see a strong opportunity in reacquiring the company. Tencent’s participation adds strategic weight. As one of China’s largest technology companies, Tencent could offer distribution, cloud infrastructure and enterprise relationships. Its involvement may also raise questions about how Manus would balance the interests of different investors.

Benchmark’s reported decision not to participate shows that not all early investors see the same risk-reward profile. Buybacks can be complex, and investors may have different views on valuation, governance and the regulatory outlook. Some may prefer to take proceeds and move on, while others may want to retain exposure to a fast-growing AI company. The final ownership structure will depend on how those negotiations conclude.

The $2 billion price is notable because it matches what Meta originally paid. In many distressed or forced sales, buyers expect a discount. A full-price buyback suggests that the investors believe Manus’s prospects have improved since the acquisition. It also reflects the difficulty of valuing fast-growing AI companies. Revenue has risen sharply, but competition and regulatory risk remain high. The reported price is therefore a signal of confidence rather than a simple mark-to-market calculation.

For Manus, the next phase would likely focus on stabilizing operations after the separation. The company would need to reassure customers that its services will continue without disruption. It would also need to manage data privacy and security concerns, especially if it operates across multiple jurisdictions. Enterprise customers often require detailed assurances about how their data is stored and used. A return to independent ownership could make those conversations easier in some markets and harder in others.

The broader AI agent market is still young. Companies are experimenting with agents for research, customer support, software development and administrative work. Reliability remains a challenge. Agents can make mistakes, require oversight and sometimes struggle with complex tasks. The companies that succeed will likely be those that combine strong models with careful product design and clear guardrails. Manus’s growth suggests it has found product-market fit in at least some segments, but sustaining that growth will require continuous improvement.

Regulatory scrutiny of cross-border AI deals is unlikely to fade. Governments are increasingly treating AI as a strategic industry, and they are reviewing acquisitions with national security and data concerns in mind. The Manus case shows that even completed deals can be reopened when regulators change their position. That uncertainty affects how investors value AI companies and how founders plan exits. It may also encourage more AI start-ups to choose structures that reduce regulatory friction from the outset.

If the buyback proceeds, Manus would become a rare example of a company returning to its early investors after a forced unwind. The outcome would be watched closely by founders, venture capitalists and regulators. It could shape expectations for future AI deals involving Chinese-founded companies with global operations. It could also influence how investors structure acquisitions in sensitive technology sectors.

For now, the reported plans remain in negotiation. The participation of HSG, ZhenFund and Tencent gives the buyback credible backing. The revenue growth strengthens the case for independence. The possible China joint venture and Hong Kong listing offer a potential path forward. Meta’s completed separation and halted data-sharing remove one immediate obstacle. The departure of Emily Dalton Smith from Meta’s internal AI agent effort adds another signal that the unwind is having practical consequences inside the larger company.

Source:Silicon UK News