China has blocked SoftBank Group Corp.’s proposed $5.4 billion acquisition of Swiss engineering company ABB’s robotics business, disrupting a major component of the Japanese investment giant’s strategy to expand into artificial intelligence-powered automation.
ABB confirmed Thursday that Chinese authorities had prohibited the acquisition of its robotics operations in China, according to Reuters. The decision followed a national security review and came despite expectations that the transaction would receive regulatory clearance.
The Financial Times first reported the regulatory intervention, citing people familiar with the matter. SoftBank had anticipated approval until last week, when it learned that China’s National Development and Reform Commission had rejected the transaction, according to the newspaper.
The decision creates uncertainty for SoftBank founder and Chief Executive Officer Masayoshi Son, who has positioned robotics as an important part of the company’s broader artificial intelligence investment strategy.
Data Security Concerns Drive Regulatory Intervention
Chinese regulators were concerned that information generated by ABB’s robotics operations could be transferred outside the country and potentially used to develop advanced AI systems, as cited by Reuters.
Those concerns extended to AI models developed by OpenAI, the U.S. artificial intelligence company in which SoftBank holds a substantial investment.
The regulatory action underscores Beijing’s increasingly restrictive approach to foreign transactions involving strategically important technologies, particularly where industrial information, intellectual property and artificial intelligence capabilities intersect.
China represents approximately 30% of ABB’s robotics business, making the country an essential market for the division. ABB also maintains substantial manufacturing and research operations in China, including a major robotics development and production center in Shanghai.
The company’s wider Chinese operations include roughly 30 local businesses and approximately 15,000 employees across nearly 130 cities, according to Reuters.
SoftBank’s Robotics Ambitions Face Setback
SoftBank agreed to acquire ABB’s robotics division in October 2025, valuing the business at approximately $5.4 billion.
The proposed acquisition was intended to strengthen SoftBank’s position in industrial automation and robotics, areas Son believes will become increasingly important as artificial intelligence moves beyond software applications into physical systems.
The deal would have provided SoftBank with an established industrial robotics operation, including manufacturing capabilities, engineering expertise and relationships with major industrial customers.
Its rejection complicates the company’s efforts to build a larger presence in what investors increasingly describe as physical AI, the integration of artificial intelligence with machines capable of operating in real-world environments.
The development also comes as SoftBank commits substantial resources to artificial intelligence investments, including its financial backing of OpenAI.
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Investors reacted negatively to the news. SoftBank shares closed 6.8% lower in Tokyo on Thursday, while ABB shares declined 1.1% during morning trading, according to Reuters.
Beijing Tightens Oversight of Foreign Technology Deals
The blocked transaction represents another significant intervention by Chinese authorities in an international technology acquisition.
Earlier in 2026, Beijing ordered Meta Platforms Inc. to unwind its acquisition of artificial intelligence startup Manus, a transaction valued at more than $2 billion, Reuters reported.
Together, the decisions illustrate the growing regulatory challenges facing multinational technology companies seeking to acquire businesses with operations, intellectual property or commercially valuable data in China.
The SoftBank decision also comes against a backdrop of strained diplomatic relations between Beijing and Tokyo.
Relations deteriorated following remarks by Japanese Prime Minister Sanae Takaichi concerning Taiwan in November 2025. China subsequently imposed severe restrictions on exports of critical minerals to Japan, according to Reuters.
Although Chinese authorities have not publicly established a direct connection between those diplomatic tensions and the ABB decision, the dispute adds to the political uncertainty surrounding Japanese investment in strategically sensitive industries.
ABB and SoftBank Continue Discussions
Despite the regulatory setback, ABB has not announced the termination of the transaction.
In a statement Thursday, the Swiss company said it had been informed by SoftBank that China’s Office of the Working Mechanism for Foreign Investment Security Review had prohibited the acquisition of ABB Robotics in China.
ABB said both companies remained engaged in discussions and were continuing to work on the transaction.
SoftBank declined to comment on the decision, while China’s National Development and Reform Commission did not immediately respond to Reuters’ request for comment.
The setback follows another regulatory complication involving a SoftBank-backed company. Digital payments provider OPay recently withdrew a planned U.S. initial public offering after citing an inquiry by an unidentified foreign regulator, Reuters reported. The offering had been expected to raise approximately $304 million.
Source: Reuters.
