China has blocked SoftBank's $5.4 billion takeover of ABB's robotics division, dealing a serious blow to the Japanese group's push into artificial intelligence-powered automation. ABB confirmed the decision on Thursday, 5 November, saying Chinese regulators had prohibited the acquisition of its robotics business in China — a move that leaves the year-old deal in doubt, even though neither company has formally walked away.
The deal, agreed in October 2025, would have handed SoftBank one of the world's biggest industrial-robot makers for an enterprise value of $5.375 billion. It was a centrepiece of founder Masayoshi Son's bet on what he calls "physical AI" — artificial intelligence embodied in machines that work in the real world. China's intervention now puts that strategy on hold.
What happened
The Financial Times first reported on Thursday that China's National Development and Reform Commission (NDRC) had told SoftBank the transaction would not be allowed to proceed, according to people familiar with the matter. ABB then confirmed the news in a short statement, saying it had been informed by SoftBank that China's Office of the Working Mechanism for Foreign Investment Security Review had "prohibited the acquisition of the ABB Robotics business in China".
The wording matters. ABB's statement refers specifically to the business in China, and it stops short of saying the whole deal is dead. The Swiss company said it and SoftBank "are in close dialogue and are working constructively on the transaction", without saying how the prohibition changes the timetable or the structure of the sale.
SoftBank declined to comment. The NDRC did not immediately respond to a request for comment, according to Reuters.
Markets reacted quickly. ABB shares were down 1.1% in morning trading after the news became public, Reuters reported, while SoftBank shares ended the day down 6.8%.
Why this matters: China is ABB's biggest robotics market, accounting for around 30% of its robot-related business. ABB says it makes 90% of the robotics it sells in China locally, and it operates about 30 local companies in the country with around 15,000 employees in nearly 130 cities. Any deal that cannot include the Chinese business is a very different deal from the one agreed a year ago.
Why China blocked it
No official reason has been published. The NDRC reviews foreign investments that might have national security implications, and the decision followed a security review that came after the deal had already cleared China's competition review in February.
According to the Financial Times, citing people familiar with the matter, the commission was concerned that data generated by ABB's robotics operations in China could be transferred overseas and used to train AI models — including those built by OpenAI, in which SoftBank is a major investor. That explanation rests on the FT's sources rather than on any Chinese announcement, and the grounds have not been set out officially.
Regulators also examined keeping intellectual property associated with parts of ABB's robotics business in China, and the review included detailed scrutiny of ABB's Chinese supply chains and a demand to retain some of the unit's manufacturing capability in the country, according to reports.
What is not yet confirmed: the exact grounds for the prohibition have not been officially stated by Beijing, and it is not clear whether the ban applies only to the Chinese portion of the business or effectively kills the whole transaction. ABB and SoftBank have not said whether they will restructure the deal, appeal, or abandon it.
A second blocked deal in 2026
The ABB decision is the second major deal blocked by China this year, after Meta was ordered to unwind its acquisition of artificial intelligence startup Manus, a deal worth more than $2 billion, Reuters reported. The pattern points to Beijing tightening scrutiny of foreign investment in domestic companies developing frontier technologies.
The timing also matters. China and Japan have been engaged in a diplomatic spat since comments by Japanese Prime Minister Sanae Takaichi on Taiwan, prompting China to severely limit exports of critical minerals to Japan, according to Reuters. The ABB ruling lands in the middle of that friction.
It has also been a difficult week for SoftBank more broadly. Less than a week earlier, SoftBank-backed digital-payments company OPay withdrew a US initial public offering, citing a regulatory inquiry by a foreign jurisdiction it did not identify. The IPO would have raised $304 million.
What the deal was supposed to do
SoftBank agreed in October 2025 to buy ABB's robotics division as part of Son's push into a sector he believes will be tied to the rise of AI. Industrial robots generate vast amounts of operational data — how machines move, grip, weld and assemble — and that data is increasingly valuable for training the AI systems that will control the next generation of machines.
That is precisely what appears to have worried Beijing: the prospect of data from factories in China flowing overseas to train models built elsewhere. The deal is also understood to be under review by regulators in the United States and Europe, according to Nikkei Asia, so the Chinese decision is not the only hurdle it faces.
| Fact | Detail |
|---|---|
| Deal value | $5.375 billion enterprise value (about $5.4 billion) |
| Agreed | October 2025 |
| Blocked by | China's Office of the Working Mechanism for Foreign Investment Security Review, under the NDRC |
| China's share of ABB robotics | Around 30% of robot-related business; ABB makes 90% of its China robotics locally |
| Status | Prohibited in China; ABB and SoftBank still in talks; not formally terminated |
| Market reaction | ABB shares down 1.1% in morning trading; SoftBank shares ended the day down 6.8% |
What happens next
Three paths are open, and none has been confirmed. ABB and SoftBank could try to restructure the transaction — for example, by carving out the Chinese business — though that would change the price and the logic of the deal. They could seek approval again, as SoftBank is examining what went wrong, according to reports. Or the deal could collapse, leaving ABB to keep a division it had planned to sell and SoftBank to find another route into robotics.
Whatever happens, the ruling sends a signal to other buyers: deals involving industrial data generated in China now face a security review that can stop them outright, even after competition clearance. For companies weighing acquisitions in robotics, AI and other frontier technologies, the Chinese market — the world's largest for robots — is no longer just a commercial prize. It is a regulatory gate.
China is ABB's biggest robotics market, and the deal's fate now turns on whether a transaction built around data and automation can survive a security review that treats that data as a national asset.
Frequently asked questions
Is the SoftBank–ABB deal dead?
Not formally. China has prohibited the acquisition of the ABB Robotics business in China, but ABB says it and SoftBank remain in close dialogue and are working constructively on the transaction. Whether the deal can be restructured or revived has not been announced.
Why did China block it?
No official reason has been given. The Financial Times, citing people familiar with the matter, reported that regulators were concerned robotics data could be transferred overseas and used to train AI models, including those built by OpenAI. The NDRC has not confirmed that explanation.
How big is the deal?
SoftBank agreed in October 2025 to buy ABB's robotics division for an enterprise value of $5.375 billion. ABB had previously anticipated net proceeds of around $5.3 billion.
Why does China matter so much to ABB's robotics business?
China is ABB's biggest robotics market, representing around 30% of its robot-related business, and ABB makes 90% of the robotics it sells in China locally. It operates about 30 local companies there with around 15,000 employees.
Has China blocked other deals this year?
Yes. Reuters reported that this is the second major deal blocked by China in 2026, after Meta was ordered to unwind its acquisition of AI startup Manus, worth more than $2 billion.
Key takeaways
- China has prohibited SoftBank's $5.4 billion acquisition of ABB's robotics division in China, ABB confirmed on 5 November.
- The reported concern is that robotics data could be transferred overseas and used to train AI models — though Beijing has not officially stated its grounds.
- The deal is not formally dead: ABB and SoftBank say they are still in talks, but the structure, timing and price are now uncertain.
- China is ABB's biggest robotics market at around 30% of the business, so any deal without the Chinese unit is fundamentally different.
- It is the second major deal blocked by China in 2026, after the Meta–Manus unwind, signalling tighter scrutiny of frontier-technology investment.
What to watch next: any statement from ABB or SoftBank on whether the deal will be restructured or abandoned, the outcome of the parallel reviews in the United States and Europe, and whether Beijing publishes its reasoning — which would set the terms for the next big technology deal to come under review.
