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China has blocked SoftBank's $5.4 billion takeover of ABB's robotics division — a shock decision that throws Masayoshi Son's ambitions in physical AI into disarray and marks the second major deal Beijing has stopped this year.
ABB confirmed on Thursday that it had been informed by SoftBank that Chinese regulators had "prohibited the acquisition of the ABB Robotics business in China". The prohibition was first reported by the Financial Times on 5 November.
What was blocked — and who blocked it
SoftBank agreed in October 2025 to buy ABB's robotics division for $5.37 billion, as part of the Japanese group's push into a sector it believes will be tied to the rise of AI. The division employs more than 7,000 people and supplies robotic arms and industrial machinery to manufacturers such as BMW, with a large presence in China.
The decision came from China's National Development and Reform Commission, the powerful state planner tasked with safeguarding supply chain security, through its foreign investment security review office. According to people familiar with the matter, the review included detailed scrutiny of ABB's Chinese supply chains and a demand to retain some of the robotics unit's manufacturing capabilities in China.
SoftBank had expected the deal to go through until it was told last week that the acquisition was prohibited, and had initially expected it to close by mid- to late 2026. The deal is also understood to be under review by the United States and Europe.
Why Beijing said no
The NDRC was concerned about robotics data being transferred overseas, where it could be used to train AI models — including those developed by OpenAI, in which SoftBank is a major investor. That concern puts the deal at the centre of the new geopolitics of AI: robotics is no longer just factory equipment, but a source of the physical-world data that trains the next generation of AI systems.
The case is the second major deal blocked by China in 2026, after Meta was ordered to unwind its acquisition of more than $2 billion of the AI startup Manus. Together, the two blocks signal that Beijing is now willing to use investment review as a tool to keep AI-related data and manufacturing capacity inside China.
What it costs SoftBank
Founder Masayoshi Son has listed the robotics deal as a key part of his ambition to play a larger role in the AI build-out, and SoftBank shares fell more than 7% in Tokyo on Thursday before ending the day down 6.8%. ABB shares fell 1.1% in morning trading. SoftBank declined to comment, and the NDRC did not immediately respond to requests for comment.
ABB said it is in close dialogue with SoftBank and that the two companies are working constructively on the transaction. SoftBank is now trying to determine whether it can seek approval again — but with Beijing's data concerns stated so plainly, any second attempt would likely need a very different structure, one that keeps Chinese robotics data and manufacturing firmly in China.
Sources: swissinfo.ch, Nikkei Asia. Internal: Wall Street Soared After the Midterms — While Data Centre Stocks Crashed.