Zuckerberg Ignores Washington And Buys Chinese AI Startup For Over $2 Billion

Meta has acquired Singapore-based AI startup Manus for more than $2 billion, marking one of the largest artificial intelligence deals of 2025 and reflecting the social media giant’s urgent need to monetize its massive infrastructure investments through new revenue streams beyond advertising.

A Rapid $2 Billion Deal Signals Meta’s Urgent AI Pivot

The transaction, completed in approximately ten days, brings a rapidly scaling AI agent company into Meta’s portfolio at a critical moment. Unlike traditional chatbots that require continuous human prompting, Manus creates autonomous AI agents capable of executing complex, multi-step tasks independently. The platform can conduct parallelized research across hundreds of sources, automate candidate screening, generate competitive intelligence reports, and execute workflows involving code and data manipulation.

The growth trajectory has been extraordinary. Manus achieved $100 million in annual recurring revenue within eight months of launching paid subscriptions in late March 2025, with total revenue exceeding $125 million by mid-December. This velocity positions the company among the fastest-scaling enterprise software companies in history, far surpassing typical five-to-seven-year timelines for reaching such revenue milestones.

Manus’ Explosive Revenue Growth Sets It Apart in the AI Race

Meta faces a fundamental challenge: justifying approximately $70–72 billion in annual AI infrastructure spending when 97 percent of revenue derives from advertising. Rosenblatt Securities analyst Barton Crockett called Manus a “natural fit” that could rank alongside Meta’s transformative Instagram and WhatsApp acquisitions, providing both immediate revenue and proven subscription business models for AI investments.

The acquisition directly addresses Meta’s monetization gap. Meta serves millions of small and medium-sized businesses through WhatsApp, creating natural distribution channels for Manus’s AI agent capabilities. The platform’s ability to automate research, customer screening, and task execution aligns directly with small business operational needs, potentially accelerating Meta’s efforts to monetize WhatsApp’s vast user base through business services beyond traditional advertising.

Cutting Chinese Ties to Clear Regulatory and Political Hurdles

Manus originated within Butterfly Effect, a startup initially based in Beijing before relocating headquarters to Singapore in mid-2025. Early investors included Chinese technology firms Tencent Holdings, ZhenFund, and HSG. Meta’s acquisition terms explicitly unwind all Chinese connections. The company stated: “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.” All existing Chinese investors have been bought out, addressing potential scrutiny under the Committee on Foreign Investment in the United States.

Xiao Hong, Manus’s 33-year-old founder and CEO, will join Meta as a vice president reporting to Chief Operating Officer Javier Olivan. Hong previously founded Nightingale Technology, which created WeChat productivity tools serving over 2 million businesses, and Butterfly Effect, an AI browser extension that gained 10 million users globally. Approximately 100 Manus employees are joining Meta.

A High-Stakes Bet on Monetizing AI Beyond Advertising

Meta will continue operating and selling the Manus service through its existing subscription model while simultaneously integrating the technology into Meta AI, WhatsApp, Facebook, Instagram, and Messenger. This approach mirrors Meta’s handling of Instagram and WhatsApp acquisitions, maintaining standalone operations while leveraging cross-platform synergies.

At over $2 billion for a company generating $125 million in revenue run rate, the transaction implies a revenue multiple of approximately 16–20x. This premium pricing reflects exceptional growth velocity and strategic value but remains within range of high-growth software acquisitions. Rosenblatt Securities maintained its Buy rating, while Morgan Stanley reaffirmed Overweight. More conservative analysts including RBC Capital and Barclays lowered targets, citing cost and capital intensity concerns.

The Manus acquisition represents Meta’s second major AI transaction in 2025, following a $14.3 billion investment for 49 percent of Scale AI announced in June. Together, the deals total more than $16 billion in AI acquisitions within seven months, aligning with CEO Mark Zuckerberg’s broader $600 billion AI infrastructure commitment through 2028.

Despite the strategic logic, execution risks remain. Integrating AI agent technology across Meta’s billions of users, managing inference costs, navigating competition, and withstanding regulatory scrutiny will test the company’s ability to transform its business model. The Manus deal provides revenue, talent, and proof of demand—but whether Meta can fully convert AI ambition into sustainable non-advertising income remains the defining question.