Tencent is reportedly in talks to acquire Manus from Meta, following Beijing intervention — company expects to remain independent of Chinese tech giant

Meta’s surprise purchase of Manus, a Chinese startup known for its advanced AI agents, caught Beijing by surprise and ordered the two companies to unwind the $2 billion deal. The Chinese tech giant Tencent, which was among the startup’s initial investors during early funding rounds, is taking the lead in buying back the startup at the same price. According to the Financial Times, other former investors, including ZhenFund and HongShan Capital Group — China-based venture capital firms — while former U.S. investors like Benchmark are unlikely to join the potential consortium.

This move marks Beijing’s increasing protectiveness of its AI companies and experts, which it considers strategic assets in its heated rivalry with the U.S. We can see this in the Chinese government’s five-year plan, which is doubling down on technological self-reliance. It has even gotten to the point that AI experts, even those working in private firms, are now required to secure approval before traveling internationally.

U.S. tech giants are investing billions of dollars to develop their AI models, even dangling hundred-million-dollar bonuses to hire AI experts — one AI founder even claimed that Meta offered a $1.25-billion bonus. It seems that China is trying to avoid a situation where its experts are enticed to work for American AI tech companies, with the Financial Times reporting that Chinese officials are calling Meta’s acquisition of Manus “a conspiratorial attempt to hollow out China’s technology base.” The order to undo the deal means that Meta cannot use Manus’ intellectual property, nor can it have its founders and employees working for the company. Still, the U.S. tech giant has had a few months to study its models and engineering expertise.

Meta has already agreed to undo the deal, with most of Manus’ operations reportedly running independently of the company. However, the Chinese startup still needs to break financially from the American tech giant by paying back the $2 billion the latter spent to purchase it. Even though Chinese companies are also investing massive amounts in AI tech, it’s still not easy to raise this amount of capital in such a short period.

Tencent, which owns the WeChat platform used by China’s 1.4 billion population for messaging, social networking, mobile payments, ride-hailing, food delivery, and more, believes that Manus would be an asset for the company. Aside from reaching an annual revenue of $500 million, its AI agent would also mesh well with the company’s increasing AI focus. “Beyond foundation models, it has become increasingly evident that agentic AI represents a breakthrough use case,” Tencent president Martin Lau said in its May earnings call. “Our platform inherently has many benefits of hosting AI agents.”