In a major move to bolster its artificial intelligence capabilities, Meta has acquired Butterfly Effect, the Singapore-based developer of the AI agent Manus, in a deal valued in the tens of billions of dollars. This acquisition, confirmed on December 30, 2025, represents Meta's third-largest purchase ever and signals a significant strategic push into the competitive AI agent landscape, directly challenging rivals like OpenAI and Google.
A Landmark Deal for Meta's AI Ambitions
The acquisition of Butterfly Effect, the company behind the Manus AI agent, is a landmark transaction for Meta. Valued at "tens of billions" of USD, it ranks as the company's third-largest acquisition, trailing only the historic purchases of WhatsApp in 2014 and the more recent talent acquisition of Scale AI in mid-2025. This deal underscores CEO Mark Zuckerberg's intensified focus on AI, which he has publicly framed as the company's top strategic priority. The negotiation and signing process was remarkably swift, reportedly completed in under ten days, a testament to Meta's urgency in securing a leading position in the AI agent space.
Meta's Major Acquisitions (by reported value):
- 1. WhatsApp (2014): USD 19B
- 2. Scale AI (2025): USD 14B (talent acquisition)
- 3. Butterfly Effect / Manus (2025): "Tens of billions" USD
- 4. Instagram (2012): USD 1B
The Rise of Manus and Its Founders
Manus is the product of a globally-minded, Chinese-founded entrepreneurial team. The company, Butterfly Effect, was initially founded in China before establishing its global headquarters in Singapore. Its journey began with Monica, a profitable AI-powered browser extension for chat, translation, and writing assistance. In early 2025, the team, led by founder and CEO Xiao Hong and joined by key figures like product lead Zhang Tao and chief scientist Ji Yichao, launched Manus. This more advanced AI agent can perform complex, multi-step tasks such as screening resumes, planning travel itineraries, and analyzing stocks based on simple instructions. By December 2025, Manus had achieved an annual recurring revenue (ARR) of over USD 1.25 billion and had processed a staggering 147 trillion tokens.
Manus / Butterfly Effect Key Metrics & Timeline:
- Founder/CEO: Xiao Hong
- 2023 Feb (Seed): Valuation ~USD 14M
- 2023 Aug (Angel): Valuation ~USD 50M
- 2024 Nov (Series A): Valuation ~USD 85M
- 2025 Mar: Manus AI Agent launched.
- 2025 Apr (Series B): Valuation ~USD 500M
- 2025 Dec (Pre-acquisition): ARR > USD 1.25B; Processed >147 trillion tokens.
- 2025 Dec 30: Acquired by Meta.
Strategic Rationale and Integration Plans
Meta's acquisition is driven by a clear strategic need. While the company has invested heavily in foundational AI models, it lacks a standout, general-purpose AI agent product for consumers. With competitors like OpenAI and Google increasingly merging model and agent capabilities, the window for independent AI agent companies was closing. Meta saw in Manus a complete, functional, and fast-growing product that could fill this gap. Unlike the Scale AI deal, which was primarily a talent acquisition, Meta is acquiring Manus for its entire product ecosystem and user base. Post-acquisition, Manus will operate independently, maintaining its brand and team in Singapore, while founder Xiao Hong will join Meta as a Vice President.
A Template for Global AI Entrepreneurship
The deal is being celebrated as a significant milestone and a potential template for AI entrepreneurs outside of Silicon Valley, particularly those of Chinese origin. Investors like Liu Yuan from ZhenFund highlighted the speed of the deal and its symbolic importance, stating it signals that "the era for this generation of young Chinese entrepreneurs has arrived." The Manus team's path—building a globally-focused product, achieving substantial revenue, and attracting acquisition interest from a tech giant—demonstrates the global reach of engineering talent and presents a viable roadmap for other startups navigating the competitive AI landscape.
The Road Ahead for AI Competition
Meta's acquisition of Manus dramatically reshapes the competitive dynamics in the AI agent market. It provides Meta with an immediate, revenue-generating product to deploy across its vast user network, potentially accelerating the monetization of its AI investments. For the broader ecosystem, it highlights the accelerating consolidation in AI, where large platforms are actively seeking to integrate the most promising applications. As noted in reports, Meta is not alone in this trend, with other Silicon Valley firms expressing acquisition interest in AI startups based in China. The success of Manus proves that innovative AI applications with strong product-market fit can emerge from anywhere and command the attention of the industry's biggest players.