Chinese tech giant Tencent is reportedly in talks to buy a majority stake in AI agent startup Manus, following Beijing’s forced unwinding of Meta’s $2 billion acquisition. The deal, which values Manus at the same $2 billion, would align with Tencent’s AI agent strategy, including plans to integrate the tech into WeChat. Manus, operating independently from Singapore, posted nearly $500 million in annual revenue. Key investors like Tencent, ZhenFund, and HSG are on board, but US firm Benchmark is sitting this one out. Beijing blocked Meta’s deal in April, citing investment rule violations and labeling it a “conspiratorial” attempt to undermine China’s tech base. They also imposed an exit ban on founder Xiao Hong. This move underscores the escalating AI arms race, where AI is increasingly seen as a strategic asset akin to “cyber-nuclear weapons”. Why it matters: This deal shows how geopolitical tensions are reshaping global AI investment, forcing US tech giants out while Chinese firms consolidate power in critical AI sectors.