The co-founders of the Chinese AI startup Manus are reportedly exploring a bold and complex financial maneuver: raising approximately $1 billion from external investors to buy their company back from Meta Platforms. The move, reported by Bloomberg News and cited by Reuters, comes after Beijing ordered Meta to unwind its multi-billion dollar acquisition of the startup, setting the stage for one of the most unusual corporate restructurings in the recent history of the Chinese tech industry.
The Saga of the Blocked Acquisition
The origins of this story lie in a deal that seemed transformative when it was announced. Meta had acquired Singapore-based Manus in late December 2025 for more than $2 billion, aiming to integrate the startup’s advanced general-purpose AI agents into its platforms. Manus had made a global splash with its AI agents, which are capable of functioning as digital employees, independently executing complex tasks such as research, data analysis, and workflow automation with minimal human input.
However, the acquisition ran into trouble almost immediately with Chinese regulators. As EastFrontier reported at the time, the National Development and Reform Commission (NDRC) launched a review into whether the deal violated China’s investment rules governing advanced domestic technology firms. The review culminated in April 2026 with a formal order for Meta to unwind the acquisition. The regulatory intervention was accompanied by severe personal consequences for the founders: two of the three co-founders Xiao Hong, Ji Yichao, and Zhang Tao were barred from leaving China during the investigation.
The $1 Billion Buyback Plan
Now, the founders are attempting to regain control of their creation. According to the Bloomberg report, they are in discussions to raise approximately $1 billion from external investors, with the funding round structured to value Manus at a level commensurate with what Meta originally paid. The founders may also inject their own capital to bridge any financial gap that emerges during negotiations. Reuters was unable to independently verify the Bloomberg report, and Manus did not immediately respond to requests for comment.
The mechanics of the buyback are complex. Meta would need to agree to sell back the company at a price that reflects the original acquisition value, and the new investor consortium would need to be assembled quickly enough to meet the timeline imposed by the NDRC’s unwind order. The legal and structural requirements of the unwind process are themselves formidable, involving the unwinding of employment contracts, intellectual property assignments, and corporate governance structures that were restructured during the acquisition.
A Potential Joint Venture and Hong Kong IPO
If the buyback is successfully executed, the resulting corporate structure could be significantly different from the original Manus entity. The company would likely emerge as a joint venture between the founders and its new financial backers, rather than a founder-controlled startup. This structure could pave the way for an initial public offering (IPO) in Hong Kong, aligning Manus with a broader trend of Chinese AI companies restructuring their corporate governance to facilitate domestic or Hong Kong listings.
This trend has been accelerating throughout 2026. Companies like Stepfun and Moonshot AI have already moved to unwind their offshore Cayman Islands structures in anticipation of Hong Kong IPOs, responding to both regulatory pressure and the growing attractiveness of Asian capital markets for AI companies.
A Warning for Cross-Border AI Investment
Beyond the immediate corporate drama, the Manus saga carries a profound message for the global investment community. It demonstrates that Beijing is prepared to intervene decisively to prevent what it views as the inappropriate transfer of strategic AI assets to foreign ownership. As EastFrontier analyzed in depth, the NDRC’s action effectively establishes a new precedent: Chinese AI companies that achieve sufficient strategic significance may be treated as national assets, regardless of where they are incorporated.
For foreign investors and technology companies considering acquisitions in China’s AI sector, the Manus case is a stark reminder that the regulatory environment has fundamentally shifted. The question of whether the founders can successfully raise $1 billion and complete the buyback will be watched closely as a test of both the resilience of China’s AI startup ecosystem and the evolving rules governing cross-border technology deals.
The broader ecosystem is already adapting to this new reality. As EastFrontier reported, multiple Chinese AI startups are now weighing full onshore reincorporation in the wake of the Manus reversal, recognizing that offshore corporate structures that were once considered advantageous for fundraising are now a potential liability in the current regulatory climate. The Manus founders’ attempt to buy back their company is therefore not merely a corporate transaction—it is a defining moment for the entire Chinese AI startup ecosystem, one that will shape how founders, investors, and regulators approach the intersection of innovation, capital, and national security for years to come. The outcome will also be closely watched by international investors who have deployed capital into Chinese AI companies through offshore structures, as it will clarify the practical limits of Beijing’s willingness to intervene in private market transactions when national security interests are invoked.