SoftBank ABB deal blocked by China, shares fall about 7%

China blocked the SoftBank ABB deal, a $5.4 billion takeover of the Swiss group’s robotics unit, ABB said in a statement on Thursday.

The decision dents SoftBank’s plans to expand into physical AI. SoftBank shares fell around 7 percent in Tokyo, and a company spokesperson declined to comment.

Why China stopped the SoftBank ABB deal

ABB said a Chinese body called the Office of the Working Mechanism for Foreign Investment Security Review prohibited the sale. A media report said the National Development and Reform Commission told SoftBank it would not approve the purchase.

The commission reviews foreign investment that could carry national security risks. According to the report, it worried that robotics data could leave China and help train artificial intelligence models, including those of OpenAI, where SoftBank is a major investor.

SoftBank had expected approval until last week, the report added. Now the company is trying to learn what went wrong and whether a new structure could earn a second look.

What the SoftBank ABB deal offered

The SoftBank ABB deal, signed in October last year, priced the unit at $5.375 billion. SoftBank would have gained over 7,000 employees, about 500,000 robots in service worldwide and customers such as BMW.

The European Commission cleared the deal without conditions in March. The US review had not finished.

Founder Masayoshi Son called the purchase a key step in his plan for a bigger role in the AI buildout. Investors had hoped it would add to revenue and profit while SoftBank awaits OpenAI’s stock market debut.

Some investors worry about Son’s AI commitments, among them a stake of nearly $65 billion in OpenAI and pledges worth hundreds of billions for data centres. They had looked to ABB for reassurance.

Analyst Kirk Boodry said “ABB Robotics lacks the cutting-edge innovation found across SoftBank’s physical AI startup portfolio”. Still, he said, its manufacturing know-how should have turned robotic concepts into real businesses.

China’s stake in robotics

China is the largest market for industrial robots. It makes up around 30 percent of ABB’s robots business, and ABB runs about 30 local companies there with about 15,000 employees.

ABB Engineering in Shanghai hosts its global robotics headquarters, along with a research centre and a production base. At its height, the robotics arm of ABB commanded over 70 percent of China’s market.

That share has since fallen. In 2024 alone, domestic makers lifted their share from 47 percent to 58 percent, according to industry data.

Fallout from the SoftBank ABB deal

This is not the first time Beijing has blocked a foreign technology deal. In April, the commission stopped Meta Platforms’ $2 billion purchase of the AI startup Manus.

Beijing has also clamped down this year on moving vital data abroad. Data sits at the heart of AI, and robots need it to work well.

Japan is home to major robot makers such as Fanuc, Yaskawa Electric and Kawasaki Heavy Industries. Most have teamed up with Nvidia to use AI in factories, hospitals and logistics.

For now, neither company has set out a plan. Meanwhile, the SoftBank ABB deal leaves Son’s AI strategy facing fresh uncertainty.