Meta, the owner of Facebook, is reportedly in talks to sell the Chinese AI startup Manus, which it acquired about a year ago for $2bn. The sale is happening at Beijing's insistence, making Meta a forced seller. When Meta bought Manus, its valuation was 20 times its annual recurring revenue of $100 million, in line with market rates at the time.

Now, Meta faces a limited pool of buyers, likely requiring Chinese approval. The most probable buyers are the original investors, including Tencent, from whom Meta initially purchased Manus. These investors may acquire Manus at a significantly lower price, possibly four or five times its current annual recurring revenue.

Despite the apparent loss, Meta may not be entirely at a disadvantage. The company integrated Manus's AI technology, which uses subagents for tasks like market research and coding, into its ad management tools. Even if the technology was later separated, Meta had the opportunity to understand its workings. In the rapidly evolving AI landscape, "acqui-rent"—acquiring technology for a limited period—can be strategic, especially for technologies that may quickly become outdated. Manus, while initially impressive, is built on Anthropic's Claude model, and other Chinese companies are developing their own competitive AI models.