Tencent in talks to become Manus' largest shareholder at $2 billion valuation

Tencent is in advanced talks to become the largest shareholder in AI agent startup Manus, replacing Meta after Beijing blocked the $2 billion acquisition, people familiar with the discussions said.

Tencent is in talks to become Manus' largest shareholder as early investors work to unwind Meta Platforms Inc.'s $2 billion acquisition of the Chinese AI agent startup, after Beijing ordered the deal blocked in April.

"Investors supporting the transaction are betting that Manus can continue to develop independently and eventually list in Hong Kong," one of the people said, asking not to be identified discussing private matters.

Existing investors including Tencent, venture firm ZhenFund and HSG — formerly Sequoia Capital China — are in discussions to unwind Meta's purchase at the same $2 billion valuation, according to two people familiar with the talks. Manus has annualized recurring revenue of close to $500 million, representing substantial growth since Meta first sought to acquire the company, one of the people said. Benchmark, a US venture capital firm that was among Manus' earlier backers, is unlikely to participate in the new structure.

The deal shows Beijing's tightening grip on homegrown AI assets. Chinese authorities have held meetings with top tech firms about potentially restricting overseas access to the country's most advanced AI models, Reuters reported this week. For Tencent, the transaction would strengthen its position in the fast-growing AI agent space without fully consolidating Manus, which will continue to operate independently from Singapore.

Deal structure mirrors blocked Meta acquisition

Under the proposed terms, Tencent would acquire the largest stake but remain a minority shareholder, the people said. Manus will not be integrated into Tencent's broader business and will maintain its independent operations in Singapore. The discussions remain ongoing and may introduce new investors, they added.

The unwind follows a broader pattern of Chinese regulatory intervention in AI dealmaking. In April, China's state planner ordered Meta to unwind its completed acquisition of Manus, triggering a complex process to reverse the transaction. Chinese authorities have also launched investigations into Manus and other local AI startups that moved abroad, seeking to determine whether they violated export control laws.

AI agent market draws strategic interest

Manus develops AI agents — software that can autonomously perform tasks such as coding, data analysis and web research. The company's rapid growth to nearly $500 million in ARR reflects surging enterprise demand for agentic AI tools, a segment that has attracted investment from major technology companies globally.

The potential Hong Kong IPO would provide a clear exit path for investors and a public market valuation benchmark for Chinese AI startups. It would also test investor appetite for AI companies operating in a tightening regulatory environment, where Beijing has indicated it may restrict overseas access to advanced models developed by firms including Alibaba, ByteDance and Z.ai.

Tencent shares traded 0.5 percent lower in Hong Kong on Thursday. At least two brokerages have maintained buy ratings on the stock, with UOB Kay Hian raising its price target to 680 Hong Kong dollars, citing strong early momentum from the company's Hunyuan Hy3 AI model.

This article is for informational purposes only and does not constitute investment advice.