China has blocked SoftBank's $5.4 billion purchase of ABB's robotics business in China, throwing one of the year's biggest physical-AI deals into doubt. ABB confirmed on 5 November that its buyer had been told the country's foreign-investment security review office had prohibited the acquisition of the ABB Robotics business in China. The wider $5.375 billion deal, agreed in October 2025, is not dead: ABB says the two companies remain in close dialogue. But with China the division's biggest market, the ruling leaves the sale's structure, timing and price uncertain.
What Beijing blocked — and what it did not
The prohibition covers the China business only, and the wording matters. ABB's statement says the review office prohibited the acquisition of the ABB Robotics business in China. It does not say the global transaction is cancelled, and neither company has announced a revised structure, a price change or a carve-out plan.
SoftBank manages approvals, and ABB says the two sides are working constructively on the transaction. SoftBank said on Friday it would promptly announce any relevant decisions. But the China business was a central attraction of the deal: more than 90 per cent of the robots ABB sells to Chinese customers are manufactured locally, and the group employs 12,700 people there.
The data question at the centre
No reason has been published for the block. The Financial Times reported, citing people familiar with the matter, that the National Development and Reform Commission worried robotics data could be sent overseas to train AI models, including OpenAI's — SoftBank is a major investor in OpenAI. That is attributed reporting, not a Chinese decision, and Beijing has not confirmed it.
The review also looked beyond data. The same report says the commission scrutinised ABB's Chinese supply chains and pressed for some of the unit's manufacturing capability to stay in China. It also examined keeping intellectual property relating to parts of the robotics business in the country, potentially requiring pieces of it to be spun off to Chinese owners.
People close to SoftBank say it was unclear which conditions were formally requested in the days before the decision. The deal had already cleared China's competition review in February, and until last week people close to SoftBank and those briefed on the regulator's process had expected the security review to end in approval.
A bad month for SoftBank
The block lands in a rough stretch for SoftBank. Its shares fell more than 7 per cent in Tokyo on Thursday, and they are down 38 per cent over the past month and 28 per cent over the past year, amid doubts about AI demand and OpenAI's decision to push its public listing into next year.
The listing delay has also put pressure on the planned flotation of SoftBank's US data-centre developer SB Energy, which is targeting a $50 billion valuation. ABB's shares fell 1.1 per cent in morning trading after the block was made public, a modest move next to SoftBank's.
Our Read
This is the second time this year that Beijing has stopped a major AI deal, after Meta was ordered to unwind its $2 billion-plus purchase of the startup Manus in April. The pattern is clear enough to name: China is treating the data its robots and models generate as an asset, not a byproduct to be sold with the factory.
That reading explains why the deal's structure may matter more than its price. If Beijing's objection is to the data leaving China, a restructured sale that keeps the Chinese business, its factories and its data inside the country could still work — but it would strip out much of what SoftBank wanted to buy.
For Son, the setback also bites because the division was meant to anchor his physical-AI push alongside the US robotics company Roze, and his talks to buy Allied Universal, the security group behind G4S, rest on the same robotics-and-AI productivity bet.
Why It Matters
The block redraws the map for AI dealmaking. Robotics and AI are converging — the robots generate the data, the models learn from it — so regulators now treat a factory sale as a data transfer, and the data's destination matters as much as the buyer's chequebook.
Any cross-border AI deal that touches Chinese operations, data or supply chains now carries a visible new risk: approval is no longer the default, even after the competition review has cleared. The same week, China's economic planner set out an AI governance agenda for the next five-year plan, signalling that Beijing intends to keep AI development inside a regulatory framework.
Background
ABB agreed to sell its robotics division to SoftBank in October 2025 for $5.375 billion, dropping a plan to spin it off. The division employs 7,000 people and made $2.3 billion of revenue in 2024. ABB has operated in China since a 1992 joint venture, and its $150 million Shanghai robotics factory opened in 2022.
Source: ABB's update and the FT report
0 Comments