The owner of Facebook and Instagram has effectively erected a firewall between itself and the Chinese-founded agentic AI service, people familiar with the matter said. Meta has barred Manus and its staff from accessing the US company’s internal data systems since the start of the month, the people said. Meta employees, in turn, can no longer use Manus tools for internal projects, the people said, asking to remain anonymous to discuss private decisions.

The ringfencing comes as Manus’s founders explore options to fulfill Beijing’s demand to undo the deal, including by raising about $1 billion to fund a buyback. Meta is “sunsetting” Manus, according to an internal memo viewed by Bloomberg News. Staff were told to migrate existing Manus projects onto Meta’s systems and not to start new work on the AI platform, the memo showed. Together, the actions taken to separate the two operations mark another step toward eventually hiving off Manus, the people said.

Once celebrated as a blueprint for Chinese AI startups keen to set foot on a global stage, Meta’s landmark acquisition of Manus quickly drew criticism for handing over key technology to a geopolitical rival, triggering a months-long probe involving tech export controls. Chinese regulators in April demanded the deal be unwound, triggering the intricate process of dismantling a completed transaction.

Manus, once hailed as a breakthrough that would challenge Silicon Valley’s dominance, is turning into a cautionary tale for Chinese entrepreneurs.

The founders got their start in China but relocated their headquarters and key staff to Singapore in 2025. When the deal was announced in December, it wasn’t clear whether Beijing would exert authority over a transaction that technically took place beyond its borders.

Manus’s three founders — Xiao Hong, Ji Yichao, and Zhang Tao — have begun discussions about raising money to fund a buyback at a valuation that would at least match the $2 billion Meta paid, Bloomberg News reported last month.

It’s unclear if discussions around a deal have advanced significantly. Manus staff have moved into Meta offices in Singapore, while investors including Tencent Holdings Ltd., ZhenFund and HSG have received their proceeds from Meta’s acquisition, people familiar with the matter said previously.