Meta Platforms (NASDAQ: META) has begun dismantling its $2 billion acquisition of Manus after Beijing ordered the tech giant to reverse the completed transaction.
Meta has completed an operational split, directing its employees to stop using Manus tools for internal projects while blocking the Singapore-based company’s staff from accessing Facebook’s internal data systems.
Manus develops general-purpose AI agents capable of executing complex tasks including market research, coding, and data analysis, and launched its first general AI agent in March last year.
The startup was founded in China before deliberately relocating to Singapore, a move known in venture capital circles as “Singapore washing.”
Singapore washing refers to the practice of Chinese founders re-domiciling in Singapore to access Western capital, Western acquirers, and Western AI models that they could not use while operating from mainland China.
Singapore’s neutral geopolitical standing and status as an international financial hub made it the most popular destination for this strategy among Chinese AI founders in 2024 and 2025.
China’s National Development and Reform Commission directed Meta to unwind the transaction in April, citing unspecified laws and regulations following a months-long regulatory probe that began almost immediately after the acquisition was announced.
The NDRC’s order made clear that offshore incorporation does not shield a deal from Beijing’s authority when the underlying technology and talent originated in China.
Once celebrated as a breakthrough for Chinese AI startups taking on American rivals, Manus has become a cautionary tale for entrepreneurs looking to shed their Chinese identity by relocating abroad.
“The unwind may be messy,” said Han Shen Lin, China managing director at The Asia Group, adding that Beijing has sent a message to its tech sector that Singapore washing has limits.
To comply with the unwind order, the three founders, Xiao Hong, Ji Yichao, and Zhang Tao, are exploring raising roughly $1 billion from outside investors to fund a buyback at a valuation matching the $2 billion Meta paid.
A successful buyback could eventually lead to a Hong Kong IPO, with Manus reorganized as a Chinese joint venture, though those discussions remain at an early stage and no firm decisions have been made.
New Chinese outbound investment regulations taking effect on July 1, 2026 give Chinese authorities broader and more formalized powers to review, block, or reverse overseas transactions involving Chinese-origin technology or talent.
For the first time, those rules create a comprehensive legal basis for China to assert jurisdiction over the exit, restructuring, or reinvestment of assets with Chinese origins, regardless of where those assets are incorporated when a transaction occurs.
The new regulations also explicitly ban cross-border transfers of technology-related talent without government approval, further narrowing the options available to Chinese founders seeking foreign partnerships.
