Meta Acquires AI Startup Manus in Deal Valued at Over $2 Billion
Mark Zuckerberg has made another blow.
Meta Platforms is also acquiring a Singapore-based AI startup, Manus, which has been the buzz of Silicon Valley ever since it was first introduced via a demo video last spring, where an AI agent was shown performing tasks such as screening job applicants, planning vacations, and managing stock portfolios. At the time, Manus stated that it was superior to the deep research of the OpenAI.
Only a few weeks later, in April, venture capital firm Benchmark led a $75 million funding round, giving Manus a post-money valuation of half a billion dollars and securing board membership for Benchmark general partner Chetan Puttagunta. According to the Chinese press, by that time, a few other high-profile investors had already pumped into Manus, with Tencent, ZhenFund, and HSG (previously, Sequoia China) already putting in a $10M round.
In mid-December, the company declared that it has since registered millions of users and is resorting to annual recurring income of over 100 billion dollars out of monthly and yearly subscribers to its membership service.
This is also around the period that Meta began negotiating with Manus; as WSJ reports, it is paying $2 billion, the valuation that Manus is said to have been seeking in its subsequent funding round.
In the case of Zuckerberg, who has bet the future of the company on AI, Manus is a new thing: an AI product that is actually generating revenue. This is particularly relevant given the increased twitchiness of investors concerning Meta spending $60 billion on infrastructure and the industry as a whole spending debt on the construction of data centres.
Meta also claims that it will continue to operate Manus as an independent entity and integrate the AI agents of the startup into Facebook, Instagram, and WhatsApp, where the Meta AI chatbot is already present to users.
One wrinkle, however, is that Manus Chinese founders established their parent, Butterfly Effect in Beijing in 2022, and then went missing to Singapore in the middle of this year. Such should cause flags to rise in Washington, but Senator John Cornyn has already dragged Benchmark as an investment in the company, expressing concern way back in May about American capital being invested in a Chinese company.
Cornyn, a Texas Republican and the senior member of the Senate Intelligence Committee, is not alone in long being one of the hawks of Congress on the subject of China and competition in technology. The issue of being tough on China has become one of the very few issues in Congress that truly are bipartisan.
Not surprisingly, Meta has already informed Nikkei Asia that once the acquisition is concluded, Manus will have nothing to do with Chinese investors, and it will cease to do business in China. A spokesperson of the Meta company told the tabloid that there will be no ongoing Chinese ownership interests in Manus AI after the deal and that Manus AI will no longer provide its services and business in China.
