According to Business Insider, Meta is acquiring the Chinese-founded AI startup Manus in a deal reported to be worth over $2 billion. Founded in March 2024 by entrepreneur Xiao Hong through his studio Butterfly Effect, Manus is pitched as a “general” AI agent for tasks like market research, coding, and design. The startup, which moved its HQ to Singapore in mid-2025, recently claimed over $100 million in annual recurring revenue and employs about 105 people. Meta announced the deal on Monday, stating it will keep Manus as a standalone product while integrating its tech, and co-founder Xiao Hong will become a Meta VP. Crucially, Meta pledges the acquisition will “fully sever” Manus’s ties to China, including shutting down its Monica AI assistant there.
The Meta AI Revenue Play
So why would Meta drop what’s likely one of its biggest acquisitions ever on a startup that’s barely a year old? Here’s the thing: it’s a classic land grab for revenue and talent. Manus wasn’t just another chatbot; it was building autonomous agents that could actually do things—screen resumes, analyze stocks, create slides. That’s the holy grail right now. And with Manus already boasting a $125 million revenue run rate, Meta isn’t just buying cool tech; it’s buying a proven, high-growth business line it can instantly bolt onto its own ecosystem. Think about it: embedding these capable agents into WhatsApp, Instagram, and Facebook could be a subscription goldmine. This isn’t about research anymore. It’s Meta’s clearest signal yet that it needs AI to start paying the bills, and fast.
The Geopolitical Headache
But this deal was never going to be simple. Manus’s Chinese roots were a giant red flag from the start. Senator John Cornyn was already questioning U.S. investment in the company back in May. In today’s climate, any tech flow between the U.S. and China, especially in AI, is under a microscope. Meta knows this. That’s why its statement is so aggressively focused on cutting ties: no Chinese ownership, shutting down services in China, relocating employees. They’re trying to perform a corporate exorcism. The promise that incoming Manus staff won’t have access to customer data and that Meta will maintain geo-blocks on its models feels like a direct script for regulators. It’s a defensive move. Meta isn’t just acquiring a company; it’s acquiring a geopolitical problem and betting it can sanitize it.
What Happens to Users & The Market?
For current Manus customers, Meta promises no disruption. The service keeps running, subscriptions remain. That’s the easy part. The bigger question is what this does to the AI agent market. A $2 billion exit for a year-old startup is a massive signal to every other founder in the space. It validates the “AI agent” category in a huge way and will likely trigger a flood of investment and copycats. But it also shows the giants are not waiting around. They’re willing to pay a massive premium to skip the line and acquire category leaders before they become real competitors. For enterprises relying on this tech, consolidation like this can be a double-edged sword. You get the stability of a Meta-backed platform, but you also lose the agility and focus of a standalone startup. The race to build useful AI isn’t just about code anymore; it’s about who has the deepest pockets to buy the best teams.
