Key TakeawaysTencent is negotiating to acquire the majority stake in AI startup Manus following Beijing’s directive forcing Meta to abandon its $2 billion purchase.In April 2026, Chinese authorities intervened, expressing national security concerns about foreign control of AI companies with Chinese origins.A Tencent-led consortium including original backers ZhenFund and HSG is arranging to repurchase Manus from Meta at a minimum $2 billion valuation.Meta initially acquired Manus in December 2025 to enhance its AI agent capabilities but has since implemented operational separation and terminated data transfers.Chinese state media previously celebrated Manus as a potential “next DeepSeek” following its development of what was marketed as the world’s first general-purpose AI agent.In December 2025, Meta completed an acquisition of AI startup Manus for more than $2 billion. Half a year later, Chinese authorities demanded the deal be reversed.According to Reuters sources familiar with the negotiations, Tencent (0700.HK) is currently in discussions to assume the position of primary shareholder in Manus. On Friday, Tencent’s shares declined 2%.Tencent Holdings Limited, TCTZFThe proposed buyback arrangement would assign Manus a valuation of at least $2 billion — matching Meta’s original purchase price. Tencent is spearheading a group of investors that includes Manus’ initial financial backers, ZhenFund and HSG.Meta, Tencent, Manus, and the investment firms did not immediately respond to requests for comment.Manus specializes in creating AI agents capable of executing tasks independently with limited human oversight. Meta purchased the Singapore-registered company to advance its own artificial intelligence agent initiatives.The transaction collapsed rapidly. Chinese regulatory authorities initiated a formal review in April 2026 to determine whether the deal breached investment regulations, invoking national security considerations.Beijing’s intervention focused on Manus’ origins — the company was established by Chinese founders and financed with Chinese investment capital, despite its Singapore incorporation. The offshore corporate structure, previously considered a potential regulatory workaround, proved insufficient.Following the April directive, Meta implemented an operational division from Manus and terminated all data exchange between the organizations, according to Bloomberg News reporting last month.Tencent’s Strategic PositionTencent had previously invested in Manus prior to Meta’s acquisition, together with HongShan. The Tencent-coordinated repurchase effectively restores the company to its previous investors at the initial valuation, now with regulatory approval from Beijing.From Tencent’s perspective, this represents a favorable arrangement. The company regains control of a startup it previously understood and supported, without paying any premium above the original valuation.Manus represented a significant asset. Earlier last year, Chinese government-affiliated media praised the company as potentially becoming the nation’s next DeepSeek after launching what it described as the world’s first general-purpose AI agent — technology designed not merely to answer queries but to independently execute complex tasks.Meta’s SetbackMeta will likely recoup its initial investment through the buyback arrangement, preventing direct financial losses. However, the benefits end there.Meta pursued cutting-edge AI agent technology and the engineering talent to continue developing it. The company is now departing without either asset.The compulsory reversal also underscores the regulatory challenges inherent in international AI transactions involving Chinese-founded enterprises, irrespective of their official country of incorporation.Media reports suggest the unwinding process may involve limitations on Manus’ founding team, potentially including travel restrictions during the ongoing regulatory examination.The Financial Times initially disclosed Tencent’s participation earlier Friday.Manus relocated its operations from China to Singapore last year. That geographical shift ultimately failed to protect the company — or Meta’s investment — from Beijing’s regulatory authority.The post Tencent (TCTZF) Takes Control of Manus AI After China Blocks Meta’s $2B Acquisition appeared first on Blockonomi.