Scooter Braun said he and the singer met 19 families who had lost loved ones, which was the "hardest two hours of either of our lives".
Ariana suffered from trauma after the attack and questioned whether she could sing her songs ever again, he added.
But she decided to do a tribute concert so the victims didn't "die in vain".
"The terrorist made a mistake... they picked the wrong God damn show," Scooter said of the bombing on 22 May - in which 22 people died.
"Because if they thought we were going to roll over they don't know Ariana and they don't know me."
Scooter spoke about the Manchester terror attack during the Big Questions with Cal Fussman podcast.
He revealed how Ariana felt in the days after a terrorist detonated a bomb in the foyer of the Manchester Arena, shortly after she had performed.
"When she found out that fans of hers had died she was so sad. She cried for days," he said.
"She felt everything - every face they announced, every name, she wore on her sleeve. Every bit of emotion because that's who she is."
Scooter said he started cancelling her Dangerous Woman tour until Ariana said she wanted to do something to pay tribute to the victims.
So two weeks later, she and other stars performed at the One Love Manchester concert to raise funds for those affected by the tragedy.
More than 50,000 people were at the concert, which included performances from Miley Cyrus, Katy Perry and Justin Bieber.
"The star of the show in my opinion, other than Ariana, was the crowd," Scooter said.
He also recalled how tough it was meeting the injured in hospital, as well as families who had lost loved ones in the attack.
"After the first family I had to help her, she was distraught and I was lost.
"It was beyond tough. But every single time we got down we reminded each other we get to go home. Our loved ones are still going to be there.
"That mother is never coming home, that daughter is never coming home, that son is never coming home, that dad is never coming home.
"We didn't have the right to be so sad we couldn't continue."