Global tech giant Meta Platforms (META) is preparing to reverse its $2.5 billion takeover of AI startup Manus after China blocked the deal on national-security grounds this week. Beijing has given both firms a few weeks to unwind the transaction and return Manus’s China-based assets to their original state.
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Meta Plans Manus Takeover Reversal Under China’s Order
Meta began integrating Manus’s AI tech into its systems after buying the firm in 2025, making a separation more complex. The unwind process ordered by Beijing will require Meta to remove any shared data or technology tied to the AI startup.
On the other hand, Manus investors, such as the California-based venture capital firm Benchmark (BHE), have already received money from the agreement. At the same time, other early investors in Asia, like Tencent (TCEHY), HSG, and ZhenFund, are expected to work with the process if the deal is fully reversed.
Regulators in Beijing also warn that both firms could face penalties if they do not fully reverse the acquisition under the set rules. Despite Manus being headquartered in Singapore, Chinese officials banned the takeover because the AI firm remains tied to its parent company, Butterfly Effect Technology, which is still based in Beijing.
China Reviewed Manus Acquisition Before Ban
Before the ban, Chinese regulators had previously opened a review and met with Manus’ co-founders, Xiao Hong and Ji Yichao, in March 2026 for questioning. After the meetings, both founders were barred from leaving the country while the regulatory review continued.
The action reflects broader pressure as the U.S.–China tensions rise, with Beijing tightening oversight of cross-border deals and AI tech transfers. Analysts have warned that the move could deter Chinese AI startups from expanding abroad and make foreign firms more cautious about buying China-linked firms.
Meanwhile, Meta Platforms still receives strong ad revenue from Chinese advertisers who target users outside China, even though its social apps are blocked in the country.
Is Meta a Good Stock to Buy Now?
According to TipRanks data, META currently has a Strong Buy consensus rating based on 45 Wall Street analyst reviews over the past three months. Of these analysts, 39 rate it a Buy, 6 assign a Hold, and 0 suggest a Sell. The stock has an average price target of about $854, implying upside potential of more than 25%. For more information on this stock’s targets, ratings, and performance, visit TipRanks Stock Comparison Center.
