Meta has taken significant steps to dismantle its $2 billion acquisition of AI startup Manus, severing operational ties and ending data-sharing arrangements as it moves to comply with a divestiture order issued by Chinese authorities on national security grounds.

According to Bloomberg, Meta has disconnected Manus from its internal systems, preventing employees from using the startup’s tools for internal projects.

The move marks the clearest indication yet that the social media giant is preparing for a full separation from the Chinese-founded artificial intelligence company.

The unwinding comes roughly two months after Beijing ordered Meta to divest its stake in Manus, underscoring China’s growing determination to maintain control over strategically important technologies, regardless of where companies are incorporated.
Meanwhile, Manus’ co-founders are reportedly exploring options to regain control of the company. Discussions held earlier this year centered on raising about $1 billion from external investors to buy back the startup from Meta.

Such a transaction could pave the way for a Chinese joint-venture structure and a future public listing in Hong Kong, which has emerged as a preferred destination for Chinese AI companies, including MiniMax and Zhipu.

What was once viewed as a landmark exit for China’s AI sector is rapidly unraveling amid escalating regulatory scrutiny.

Chinese authorities have broadened restrictions on the movement of researchers and executives at private technology firms, requiring government approval for overseas travel.

Beijing is also tightening oversight of foreign investment in artificial intelligence.

Reports indicate that major AI companies, including Moonshot AI, StepFun and ByteDance, may be required to pipipipuupl,asobtain government approval before accepting U.S. capital, adding another layer to China’s efforts to exert greater control over its fast-growing AI industry