META has reached an exclusive agreement to acquire Butterfly Effect, the Chinese developer of the AI agent Manus, in a multi-billion dollar deal. This marks Meta’s third-largest acquisition, following WhatsApp and Scale AI.

Founded in 2022 by Xiao Hong in Wuhan, the company finalized the agreement in approximately 10 days. Xiao will become a vice president at Meta, while Manus will continue to operate independently. Prior to the acquisition, the startup was negotiating a new funding round at a US$2 billion valuation.

Manus, an AI agent capable of using tools autonomously for complex tasks, reached US$100 million in Annual Recurring Revenue (ARR) in mid-December. Reports indicate that ByteDance previously offered US$30 million for the team in early 2024.

Manus became a sensation in Silicon Valley this spring after a slick demo video went viral. The clip showcased the AI agent screening job candidates, planning vacations, and analyzing stock portfolios. At the time, Manus claimed its performance surpassed that of OpenAI’s Deep Research. The firm also announced a strategic partnership with Alibaba’s Qwen AI team in March.

By April, just weeks after launch, early-stage firm Benchmark led a US$75 million funding round that valued Manus at US$500 million post-money. General partner Chetan Puttagunta joined the board. Other prominent backers, including Tencent, ZhenFund, and HSG (formerly Sequoia China), had already invested via an earlier US$10 million round.

Although Bloomberg raised questions when Manus began charging monthly fees of US$39 or US$199 for access to its AI models, the company recently announced it had since signed up millions of users and surpassed US$100 million in ARR.

According to The Wall Street Journal, that is when Meta entered negotiations, ultimately agreeing to pay US$2 billion — the same valuation Manus was seeking in its next funding round.

For Mark Zuckerberg, who has staked Meta’s future on AI, Manus represents something new: a profitable AI product.

Meta says it will maintain Manus’s independent operations while integrating its agents into Facebook, Instagram, and WhatsApp, where Meta’s own chatbot, Meta AI, is already available.

“Joining Meta allows us to build on a stronger, more sustainable foundation without changing how Manus works or how decisions are made,” said Manus CEO Xiao in a company release.

Manus’ AI tools have attracted interest from other major tech firms. In October, Microsoft began testing Manus on Windows 11 PCs, enabling users to create websites from local files.

To date, Manus claims to have processed more than 147 trillion tokens of text and data and to support over 80 million virtual computers. It offers both free and paid subscription tiers.

(SD-Agencies)