Chinese technology giant Tencent is in talks to become the largest shareholder in artificial intelligence startup Manus, as investors explore alternatives after Chinese regulators ordered Meta to unwind its $2 billion acquisition of the company, according to people familiar with the matter, Reuters reported.
Tencent is negotiating a deal alongside Manus' original investors, including ZhenFund and HSG, to buy back the AI startup from Meta in a transaction valued at no less than $2 billion.
The discussions come after Beijing ordered Meta to reverse its acquisition of Manus following a regulatory review into whether the cross-border deal violated China's investment rules. The Financial Times first reported Tencent's negotiations earlier on Friday.
Buyback plan takes shape
Reuters reported that the proposed transaction would see Tencent emerge as Manus' largest shareholder, while existing backers ZhenFund and HSG would also participate in the buyback.
The talks reflect growing efforts by investors to restructure ownership of the AI startup after regulatory scrutiny derailed Meta's acquisition.
Regulatory pressure on cross-border deals
Meta announced its acquisition of Manus in December as part of its strategy to strengthen its capabilities in agentic AI, an area focused on AI systems capable of performing complex tasks with minimal human intervention.
However, China launched a review of the deal in April, citing concerns over compliance with investment regulations. According to Reuters, the order requiring Meta to unwind the transaction became one of the latest examples of Beijing challenging cross-border acquisitions involving companies with Chinese ties amid heightened geopolitical tensions between China and the United States.
Following the regulatory action, Bloomberg News reported last month that Meta had internally separated its operations from Manus and halted data sharing between the two companies.
Manus' rise in AI
Manus relocated its operations from China to Singapore last year while continuing to develop AI agents designed to autonomously complete tasks with limited human input.
The company attracted widespread attention early last year after unveiling what it described as the world's first general AI agent. Reuters reported that the launch prompted state media and industry commentators to compare Manus with DeepSeek, positioning it as one of China's most promising AI startups.
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