Technology delivered, employees gone: Why does Manus want to buy back the company from Meta?

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The founder of Manus was reported yesterday to be evaluating a $1 billion fundraising plan to buy back the company from Meta. However, with the core technology already integrated into Meta’s services and employees already stationed at Meta’s Singapore office, what is the strategy behind this move? (Previous coverage: Manus founder to raise $1 billion to "buy back company" from Meta and pursue Hong Kong IPO) (Background: The truth behind AI unicorn Manus clearing its community overnight, laying off 70% of staff, and fleeing China?) With the company’s technology already integrated into the buyer’s services and employees already reporting to the buyer’s office, why would they want to "buy back" the company after having already given away its most valuable assets? As reported by BlockTempo last night, the founders of Butterfly Effect, the parent company of Manus AI, are evaluating a fundraising of approximately $1 billion to buy back the company from Meta at a valuation of at least $2 billion, with plans to restructure as a Chinese joint venture and pursue a Hong Kong IPO. To understand this buyback, we must analyze the interests of the three parties involved. The founders' calculation: Xiao Hong and Ji Yichao are under exit bans, a clear signal that their personal freedom is restricted. In this situation, "buying back the company" is equivalent to using $1 billion (plus funds from a Hong Kong IPO) to achieve two things: first, to demonstrate goodwill to Beijing and obtain an exit permit; second, to regain capital and continue operating in the Chinese market through a compliant joint venture structure. Meta’s calculation: The fact that the code has been integrated into Meta’s services will not change due to a buyback. For Meta, this transaction is equivalent to recouping a large amount of cash while retaining the integrated technological achievements, all without bearing the geopolitical risks of operating an AI company in the Chinese market. Beijing’s calculation: This is the most critical layer. The NDRC’s ban is significant because of the signal it sends: the "Singapore whitewashing" path is ineffective, and cross-border transfers of core AI technology require prior approval. Furthermore, the exit ban allows Beijing to retain both the technology and the talent, demonstrating how far its regulatory reach extends. Investors are facing a real paradox: who would be willing to invest at a $2 billion valuation in a company whose core technology is already inside Meta? There are perhaps two answers: first, believing that Xiao Hong and others can rebuild equivalent products based on their technical accumulation; second, betting that the scale of the domestic AI Agent market in China is sufficient to support this valuation. However, neither of these premises is an easy bet to make. The current outline of the plan is: raise approximately $1 billion, with the remaining balance covered by the founders themselves or through equity swaps. A valuation of at least $2 billion means investors would be entering at the same price as Meta’s exit, with no discount. The planned "restructuring as a Chinese joint venture" is a structural compromise signal deliberately sent to Beijing: a joint venture implies Chinese corporate ownership and jurisdiction under Chinese law, effectively returning part of the company’s governance sovereignty to Beijing. This is the greatest common divisor path possible under regulatory pressure. The significance of a Hong Kong IPO lies on another level. Since 2023, the HKEX listing rules for technology companies have tilted toward the new technology board, allowing for dual-class share structures. For the founders, Hong Kong is closer to international capital markets than the A-share market, and less susceptible to geopolitical scrutiny than New York. This choice itself is a compromise: not entirely under China’s jurisdiction, nor entirely outside the sight of the U.S. As for the timeline, it is still in the evaluation stage with no formal announcement. Whether the exit ban will be lifted, how the joint venture structure will be designed, and who the cornerstone investors will be remain unknown. Whether this transaction can ultimately be completed depends on whether Beijing is willing to accept this structure and whether investors are willing to accept this valuation. The answers to both questions are not in the hands of Xiao Hong. In 2022, Xiao Hong, Ji Yichao, and Zhang Tao founded Butterfly Effect in Beijing. In March 2025, Manus was officially released, claiming to be the world’s first general-purpose AI Agent capable of autonomously completing tasks such as developing websites, analyzing stocks, and searching for rentals, with invitation codes once fetching as much as 200,000 RMB. In April of the same year, veteran Silicon Valley VC firm Benchmark led a $75 million Series B round, pushing the valuation to $500 million. Then came the rapid geographical shift: in June 2025, Butterfly Effect relocated its registration to Singapore, laying off about 80 employees and retaining about 40

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