“The $2.5 billion deal could herald a new era for China-linked AI companies and U.S. investors.”
“The assumptions that underlie the East-West divide were turned upside down Monday when Meta Platforms said it was buying Manus, which is now based in Singapore. The deal, which was valued at $2.5 billion, according to people familiar with the matter, included a $500 million retention pool for the startup’s employees, one of the people said.”
“Chinese AI chip makers, chatbot developers and robotics startups have recently raised billions of dollars and are preparing for initial public offerings in Shanghai or Hong Kong. But they still face challenges squaring off with U.S. rivals that can access enormous sums to compete globally.”
“The founders of Manus made strategic decisions to distance it from its Chinese roots, helping position the company for U.S. investment.”
“Winston Ma, a professor at New York University School of Law and a partner at Dragon Capital, said that if the deal closes smoothly, “It creates a new path for the young AI startups in China.” The question is “whether D.C. will support this or say this is just another way of U.S. capital being invested into a Chinese company,” he said.”
If it closes with no major regulatory moves, it potentially plows a new path for US/China AI company cross-investments going forward. More like the old tech days.
Meta’s own announcement of the deal frames it almost as another AI ‘Acqui-hire’ which we’ve seen a lot of this year. A company with a focus on enterprise customers, which is something that is a possible additional opportunity for Meta as I’ve outlined in another post.
“We are excited to announce that Manus is joining Meta to bring a leading agent to billions of people and unlock opportunities for businesses across our products.”
“Manus has built one of the leading autonomous general-purpose agents that can independently execute complex tasks like market research, coding, and data analysis. We will continue to operate and sell the Manus service, as well as integrate it into our products.”
“Manus is already serving the daily needs of millions of users and businesses worldwide. It launched its first General AI Agent earlier this year and has already served more than 147T tokens and created more than 80M virtual computers. We plan to scale this service to many more businesses.”
“Manus’s exceptional talent will join Meta’s team to deliver general-purpose agents across our consumer and business products, including in Meta AI.”
“We’re excited to welcome the Manus team and help improve the lives of billions of people and millions of businesses with their technology.”
“Deal is one of first in which a major U.S. tech company has bought a startup with Chinese roots.”
“Meta Platforms has agreed to acquire AI startup Manus, a Singapore-based company with Chinese founders that conducts deep research and performs other tasks for paying users.”
Manus was already on a Software execution, as well as a financial and globally distributed funding roll:
“Meta is closing the deal at more than $2 billion, according to people familiar with the acquisition. Manus was seeking a fresh round of fundraising with a valuation of $2 billion when Meta approached the startup, some of the people said.”
“Manus’s co-founder and chief executive, Xiao Hong, who often goes by the nickname “Red,” will report to Javier Olivan, chief operating officer of Meta, some of the people said.”
“The acquisition is among the highest-profile examples of a major U.S. tech company buying an artificial-intelligence product developed in Asia’s AI and startup ecosystem.”
“Manus gained a wide following after previewing in March an AI agent capable of producing detailed research reports and building custom websites, using AI models developed by companies such as Anthropic and China’s Alibaba. That demo followed the release of DeepSeek, a made-in-China AI model that rocked Silicon Valley because of its advanced capabilities, coupled with claims by its developer that it was developed with far less computing power than American rivals.”
The Meta move on a China origin AI company with a focus on enterprise AI software services and software is a differentiated move vs its peers:
“The deal is a move in a new direction for Meta, which is investing aggressively in AI to compete with Google, Microsoft and OpenAI. The deal would help the social-media giant cement its position in the product segment of AI agents, an increasingly intense battlefield of AI companies that make tools to conduct complex tasks with minimal human input. Microsoft has operated a popular AI assistant, Copilot.”
“Meta says it plans to continue to operate and sell Manus’s service and integrate it into its suite of social-media products. Meta has previously touted so-called open-source models that are largely free to access, modify or distribute.”
“We plan to scale this service to many more businesses,” Meta said in its announcement about the deal. Meta spokesman Andy Stone said that there would be no continuing Chinese ownership interests in Manus after the transaction and that the startup would discontinue its services and operations in China.”
And the public markets seem to be taking it in stride:
“Meta shares rose 1.3% in Tuesday morning trading.”
“Meta’s existing AI offerings are widely available free in services including Instagram and WhatsApp, and the company has also fully incorporated AI into its advertising in ways that have fattened its bottom line, according to analysts.”
The Meta moves on new AI directions has already been well digested by the AI industry and markets this year:
“After Meta faced unexpected challenges earlier this year while preparing to roll out a new model, Chief Executive Mark Zuckerberg went on a recruiting blitz to build an AI dream team, offering top executives and researchers multimillion-dollar paydays.”
“The company acquired a 49% stake in startup Scale AI that valued Scale at $29 billion, and Scale founder Alexandr Wang joined the social-media giant as its chief AI officer.”
Manus too has a stellar execution record to date in its short history:
“Manus has garnered millions of users since its spring launch, including some who pay subscriptions to use its models for analysis, coding and other tasks.”
“In April, Manus raised $75 million in a fundraising round led by venture firm Benchmark. As part of the deal, Benchmark general partner Chetan Puttagunta joined the company’s board. After the investment, Manus’s valuation was boosted to $500 million, people familiar with the matter said. It also counts HSG, ZhenFund and Tencent as major investors.”
“In December, the startup announced it had crossed $100 million in annual recurring revenue, eight months after it launched. Around the same time, Meta started negotiating with the company for the acquisition, some of the people said.”
“Joining Meta allows us to build on a stronger, more sustainable foundation without changing how Manus works or how decisions are made,” Xiao said in an announcement Monday. Xiao is one of two Chinese co-founders of the company.”
“The parent company behind Manus, Butterfly Effect, was founded in 2022 and had offices in Beijing and Wuhan. In October 2024, the company started developing Manus. Although most of its researchers and engineers were based in China, Manus was launched outside the country as it used many American AI models not available in China.”
“After securing investment from Benchmark, the company officially moved its headquarters to Singapore. U.S. lawmakers have criticized Benchmark for backing an AI company with ties to China. Manus has also shelved its plan to develop a version for the Chinese market, people familiar with the matter said.”
“Manus has around 100 employees, mainly in Singapore.”
Other writeups provide additional useful context as well like these from Nikkei Asia, Bloomberg and Spyglass. Especially in the context of Manus moving away even further from its China roots. As Nikkei Asia notes:
“The financial terms of the deal were not disclosed, but a source close to the deal told Nikkei Asia that Meta will pay between $2 billion and $3 billion for the startup and that its other investors have exited. Meta and Manus did not comment when asked about the size of the deal, though Meta earlier told Nikkei Asia that Manus will not have any ties to Chinese investors and will no longer operate in China after the acquisition.”
“There will be no continuing Chinese ownership interests in Manus AI following the transaction, and Manus AI will discontinue its services and operations in China,” a Meta spokesperson said.”
“Manus’s earlier investors included Benchmark, Chinese backers such as Zhen Fund, Tencent, and HSG, formerly Sequoia China.”
These details and context on a global US/China AI deal are notable in that it provides a template for potentially other deals into next year and beyond. As Nvidia founder/CEO Jensen Huang has repeatedly highlighted, half the world’s top AI talent is in and from China, and China represent the second largest AI market in the world.
So this deal sets a new milestone in this AI Tech Wave, with new possible paths for US/China tech/AI deals. And a Bingo card surprise indeed.
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