China’s Office of the Working Mechanism for Foreign Investment Security Review has blocked the sale of ABB’s robotics division to SoftBank Group Corp., effectively halting a deal valued at $5.375 billion. The decision, confirmed by ABB on November 5, 2025, forces a major shift in the Japanese investment firm’s strategy to expand into the field of physical artificial intelligence.
The transaction, which was originally signed on October 8, 2025, would have integrated ABB’s robotics business—including roughly 7,000 employees and a vast industrial client list—into SoftBank’s portfolio. The acquisition was intended to provide SoftBank with approximately 500,000 robots already installed worldwide, alongside a client list that includes major manufacturers like BMW. While the European Commission had cleared the acquisition without conditions in March, the intervention by Chinese regulators represents a significant setback for SoftBank founder Masayoshi Son, who viewed the deal as a vital step in his ambition to play a larger role in the artificial intelligence buildout.
Regulatory Hurdles for Physical AI
The rejection follows a pattern of heightened scrutiny by China’s National Development and Reform Commission (NDRC) regarding foreign control over domestic technology and data. The NDRC is responsible for reviewing foreign deals that may raise national security issues. Reports indicate that regulators have moved to safeguard data, which is considered the foundation of modern artificial intelligence. This is particularly relevant in the robotics arena, where data is fundamental to ensuring machines function effectively. Beijing has recently clamped down on the transfer of vital information abroad, viewing operational data as a national security asset.
The scale of the impact is tied to the market presence of the target business. China remains the world’s largest single market for industrial robotics, and ABB’s division has historically maintained a deep footprint there. At its peak, the business held more than 70% of the Chinese market, though that share had shifted as domestic manufacturers’ presence increased from 47% to 58% in 2024. ABB continues to operate a manufacturing hub in China with a dedicated robotics team of more than 2,000 people. Handing this infrastructure and the underlying technology to a Japanese buyer was the aspect of the deal most exposed to Beijing’s veto.
China has blocked SoftBank's planned acquisition of ABB's robotics division, a deal valued at approximately $5.4 billion. Why it matters: Robotics is becoming strategically important, and international investment in advanced industrial technology faces growing geopolitical… pic.twitter.com/pUma836stD
Strategic Implications for SoftBank and ABB
For SoftBank, the blocked deal complicates its ambitions to pivot toward machines that operate in real-world environments. The firm had positioned the acquisition as a cornerstone of its “physical AI” strategy, aiming to move beyond chips and software into machines that actually move. Investors had previously looked to the expected contribution of the ABB unit to SoftBank’s bottom line as a form of assurance against overextension, especially as SoftBank manages a near-$65 billion bet on OpenAI and commitments to massive data center projects.
ABB Robotics lacks the cutting-edge innovation found across SoftBank’s physical AI startup portfolio, but its domain expertise and manufacturing knowhow had been expected to transform robotic concepts into actual businesses,
Kirk Boodry, Bloomberg Intelligence analyst
The Zurich-based ABB, a company with over 140 years of history and approximately 110,000 employees worldwide, remains in close dialogue with SoftBank. Both sides are described as working constructively on the transaction, though the path forward remains unclear. With China representing roughly 30% of ABB’s robot-related business, the economic viability of the divestment depends heavily on what regulators allow in that specific market.
Precedent in Foreign Investment Reviews
The veto is not an isolated event in the current regulatory environment. In April, China’s NDRC blocked Meta Platforms’s $2 billion acquisition of the agentic AI startup Manus, issuing a one-line notice that it had prohibited the foreign investment in accordance with laws and regulations. These actions show a trend where foreign acquisitions involving advanced manufacturing, robotics, and industrial data are subject to rigorous national security reviews. Japan, home to major industrial robot makers such as Fanuc, Yaskawa Electric, and Kawasaki Heavy Industries, is also monitoring these shifts closely as these firms partner with entities like Nvidia to maintain a competitive edge.
As noted by analysts, any cross-border acquisition involving robotics or industrial automation must now treat Chinese regulatory approval as a live veto rather than a formality. Future transactions may require data-localization commitments, such as keeping data onshore or limiting access for overseas teams, or even structural changes like carving out the Chinese business entirely. For now, the $5.375 billion deal remains prohibited, creating uncertainty for both the Swiss-Swedish conglomerate and its would-be Japanese buyer.
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CHINA MOVES TO STOP SOFTBANK’S TAKEOVER OF ABB’S ROBOTICS UNIT, ACCORDING TO FT
China has blocked the China part of SoftBank's $5.4 billion purchase of ABB's robot business. ABB, the Swiss engineering company, said today that SoftBank told it China's foreign investment security review office has stopped the purchase of ABB Robotics in China for now. ABB…
China blocks SoftBank’s $5.4bn takeover of ABB’s robotics division https://t.co/fMl8fTY0km
FT scoop: China blocks SoftBank’s $5.4b takeover of ABB’s robotics division * NDRC informed Softbank the decision in a recent change of heart * China is ABB's biggest market for robotics, mostly made in China. Co employs ~12,700 in the countryhttps://t.co/DAPbdXpDal
