China blocks SoftBank’s $5.4 billion ABB robot unit takeover

China has blocked the sale of ABB’s robotics unit to SoftBank Group, dealing a blow to the Japanese investment firm’s plans to expand into physical AI.

A Chinese government agency blocked the $5.4 billion deal, ABB said in an emailed statement. The takeover was widely expected to bolster SoftBank’s revenue and profit while it awaits a boost from OpenAI’s public debut.

SoftBank’s shares were down around 7% in Tokyo on Thursday. A company spokesperson declined to comment.

Founder Masayoshi Son has listed the deal as a key part of his ambition to play a larger role in the artificial intelligence buildout. The Tokyo-based firm was looking to take over a business from Swiss-Swedish conglomerate ABB with more than 7,000 employees, which supplies robotic arms and industrial machinery to manufacturers like BMW and has a large presence in China.

Investors worry about Son’s commitments to AI, from SoftBank’s near-$65 billion bet on OpenAI to pledges of hundreds of billions of dollars on data center projects. Some had looked to ABB’s expected contribution to SoftBank’s bottom line for assurance that the company was not overextending itself.

“ABB Robotics lacks the cutting-edge innovation found across SoftBank’s physical AI startup portfolio, but its domain expertise and manufacturing knowhow had been expected to transform robotic concepts into actual businesses,” said Bloomberg Intelligence analyst Kirk Boodry.

Beijing’s move against the ABB deal casts more uncertainty over SoftBank’s ambitions, and reflects the Chinese government’s renewed emphasis on safeguarding its data and technology in the AI era.

In April, China’s powerful National Development and Reform Commission blocked Meta Platforms’s $2 billion acquisition of agentic AI startup Manus, issuing a one-line notice saying it had decided to prohibit foreign investment in the startup in accordance with laws and regulations.

SoftBank’s acquisition was similarly subjected to a foreign investment security review by the state planner, according to an earlier report in the Financial Times. China’s Office of the Working Mechanism for Foreign Investment Security Review prohibited the deal, according to the ABB statement.

Beijing, recognizing how data is the foundation of artificial intelligence, has this year clamped down on the transfer of vital information abroad. That’s true also of the robotics arena, where data is fundamental to eventually making robots work.

Japan is home to many of the world’s biggest industrial robot makers including Fanuc, Yaskawa Electric and Kawasaki Heavy Industries. Most have partnered with Nvidia to explore ways to use AI inside factories, hospitals and logistics networks and stay ahead of rising competition from China.