Meta's begun tearing apart its $2 billion deal with Manus, the Chinese-founded AI startup it bought less than a year ago. The company's cut Manus off from its internal systems, stopped employees from using Manus tools for internal projects, and halted all data sharing between the two firms, Bloomberg reported. This is the most concrete step yet toward complying with a divestiture order Beijing issued roughly two months ago, citing national security concerns.

The operational separation is dramatic. Just months ago, Meta was touting Manus as a key piece of its AI strategy — the startup specialized in autonomous AI agents that could perform complex tasks like booking flights or analyzing spreadsheets without human guidance. Now Meta's scrambling to unwind the integration.

Beijing's demand came as a surprise to many in Silicon Valley. The Chinese government rarely intervenes in cross-border tech acquisitions after they've closed, especially ones involving American buyers. But Manus's technology — particularly its ability to create AI agents that interact with real-world systems — triggered red flags in Beijing, which views advanced AI as a strategic asset.

The $2 billion price tag made Manus one of Meta's biggest AI bets. For context, that's roughly what Meta paid for the VR fitness app Supernatural in 2021. But while Supernatural was about content, Manus was about capability — the kind of AI that could eventually replace human workers in certain tasks.

Meta hasn't publicly commented on the divestiture process. But the company's actions speak loudly: cutting Manus off from Meta's infrastructure means the startup's tools can no longer access Meta's vast data or computing resources. It also means Manus employees — many of whom are based in China — are effectively isolated from Meta's day-to-day operations.

What happens next is unclear. The divestiture order requires Meta to fully sell or spin off Manus, but finding a buyer for a Chinese AI startup with national security baggage won't be easy. Chinese tech giants like Baidu or Alibaba could be interested, but they'd face their own regulatory hurdles. Alternatively, Meta might be forced to simply shut Manus down, wiping out the $2 billion investment.

For the broader tech world, this is a warning shot. The US-China tech war has mostly played out through export controls and investment bans — think Huawei and TikTok. Now it's hitting M&A deals that were already closed. Any American company that bought a Chinese AI startup in recent years is probably checking its paperwork right now.

Meta's retreat also highlights how fragile cross-border AI deals have become.