Meta Acquires AI Startup Manus in $2 Billion+ Deal to Boost AI Capabilities

Meta has left its mark on history by acquiring Butterfly Effect, a Chinese artificial intelligence firm, and Manus, its flagship autonomous agent, in a billion-dollar deal. 

The deal, which was concluded in ten days, will be the third-largest acquisition of Meta so far, after the acquisition of WhatsApp, which cost $19 billion, and the recent acquisition of Scale AI, which cost $14.8 billion.

Rise of the Startup

Butterfly Effect was established by Xiao Hong in 2022 in Wuhan, and it launched its autonomous agent, Manus, which has the ability to use tools independently to solve complex tasks, including code debugging and market forecasting. 

In mid-December 2025, the company had reached an annual recurrent revenue (ARR) of $100 million, due to the strong enterprise demand during the AI boom in China. 

Upon becoming the Vice President of Meta, Xiao has been an independent manager or put in charge of the group, reports indicate that ByteDance had previously offered $30 million for the team in early 2024.

Strategic Rationale

In addition to the financial investment, the takeover is strategic. Meta can double down on its AI spending due to strong results in the first quarter. 

More than 50% of the anticipated global ad spending this year and 56.2% in 2026 are anticipated to be absorbed by Meta Platforms and its advertising rivals, Alphabet and Amazon. 

Additionally, the business is making significant investments in AI models, infrastructure, and research. 

In comparison to 2025, META anticipates a substantial increase in capital expenditures in 2026. 

Meta Platforms projects total revenues for the fourth quarter of 2025 to be between $56-$59 billion. 

According to the Zacks Consensus Estimate, revenues for the fourth quarter of 2025 are expected to reach $58.4 billion, a 20.7% increase over the same period last year.

Future Outlook

GlobalData estimates that Manus reached an annual revenue run rate of roughly $100 million to $125 million within a year of launch.

 This figure will be part of an overall rise in cloud AI revenues in 2026. Unless, the U.S.–China tensions, which are increasing and the threat of export controls, technology transfers might be limited. H

However, the merger will put Meta in the best position to dominate the estimated $50.31 billion agent market in 2030, which could turn enterprise AI into an actual implementation rather than a potential concept.