China Blocks SoftBank’s $5.4 Billion Takeover of ABB’s Robotics Division

China has told Japanese investor SoftBank it will not allow its $5.4 billion acquisition of ABB’s robotics division to go ahead, dealing a sharp setback to chief executive Masayoshi Son’s push into artificial intelligence-powered robots.

ABB confirmed on Thursday that China’s state planner had blocked the deal, which was first reported by the Financial Times. Reuters reported that SoftBank had expected the transaction to be approved until it was told last week that the National Development and Reform Commission (NDRC) had prohibited it.

A decision SoftBank did not see coming

SoftBank agreed in October 2025 to buy the Swiss engineering group’s robotics business for about $5.375 billion, with completion planned for mid-to-late 2026. The deal had won unconditional approval from the European Commission in March, while approvals from China and the United States were still pending as of late October.

SoftBank declined to comment on the decision, and China’s NDRC did not immediately respond to a request for comment. Reuters said it could not immediately verify the Financial Times report.

ABB said it and SoftBank “are in close dialogue and working on the transaction”, leaving the door open to a revised approach, though the grounds for the decision were not disclosed.

Data, AI models and national security

The NDRC reviews foreign investment that might have national security implications. According to the Financial Times, the commission was concerned that robotics data generated in China could be transferred overseas and used to train AI models, including those developed by OpenAI, in which SoftBank is a major investor.

The case is the second major deal blocked by China this year, after Meta was ordered to unwind its acquisition of artificial intelligence startup Manus, worth more than $2 billion. The episode comes as Beijing tightens scrutiny of foreign investment in domestic startups developing frontier technologies.

SoftBank’s SB Energy is building a vast AI campus for OpenAI in Ohio, leasing about 8 gigawatts of capacity to the ChatGPT maker for 20 years — a project that underlines how central OpenAI has become to Son’s strategy.

What is at stake

China is ABB’s biggest robotics market, representing around 30% of its robot-related business. The Swiss group operates about 30 local companies in China with around 15,000 employees in nearly 130 cities, and its Shanghai engineering centre is home to its global robotics headquarters and an important research-and-development and production base.

For Son, robotics is a core component of the AI investment strategy he has built around SoftBank. The deal was meant to give the group a manufacturing backbone for what he calls physical AI: robots that can sense, learn and act in the real world.

Investors reacted swiftly. SoftBank shares were down about 5% in Tokyo before the report was published, and ended the day down 6.8%.

A wider chill between Beijing and Tokyo

The block also lands against a worsening diplomatic backdrop. China and Japan have been engaged in a diplomatic spat after remarks by Japanese Prime Minister Sanae Takaichi on Taiwan last November, prompting China to severely limit exports of critical minerals to Japan.

Technology deals have increasingly been caught in US-China friction as well. In a separate case reported this week, Oracle scrapped a $7 billion chip deal with Tencent under pressure from Washington. European lawmakers have urged a security review of Chinese-made BYD cars over similar concerns about data and technology.

What happens next

SoftBank is now assessing what went wrong and whether it can seek approval again, according to the Financial Times. It is not yet clear whether a restructured deal — for example, one keeping some intellectual property inside China — could satisfy Beijing.

The United States review of the transaction is still pending, and ABB and SoftBank have not said whether they will walk away, renegotiate or wait. For now, a deal that was supposed to close within months is in limbo, and the world’s largest robotics market has sent a clear signal about where its red lines lie.