Why Beijing blocked SoftBank’s $5.4 billion ABB Robotics deal? Setback for Masayoshi Son’s physical AI ambitions
China has blocked Japanese investment conglomerate SoftBank Group’s proposed $5.4 billion acquisition of the robotics business of Swiss-Swedish engineering giant ABB, dealing a significant setback to founder Masayoshi Son’s ambitions to expand into physical artificial intelligence (AI).
According to a report by The Japan Times, ABB confirmed that a Chinese government agency had prohibited the transaction. The decision highlights Beijing’s growing scrutiny of foreign investments in strategically important technology businesses amid intensifying global competition in artificial intelligence and robotics.
The acquisition was expected to strengthen SoftBank’s revenue and profitability as the Japanese investment firm continues to expand its AI portfolio and awaits a potential financial boost from OpenAI’s anticipated public listing.
SoftBank founder Masayoshi Son had identified the proposed acquisition as an important part of his strategy to establish a stronger position in the emerging physical AI industry.
The Japanese company planned to acquire ABB’s robotics division, which employs more than 7,000 people and manufactures robotic arms and industrial machinery for major manufacturers, including BMW.
The business also has a substantial presence in China, making the transaction particularly significant from the perspective of Beijing’s technology and investment security policies.
The acquisition would have given SoftBank greater exposure to industrial robotics, a sector increasingly seen as a major growth opportunity as AI technology moves beyond software applications into physical machines and automated industrial operations.
China’s decision comes at a time when investors are closely examining SoftBank’s extensive financial commitments to artificial intelligence.
Masayoshi Son’s investment strategy includes a nearly $65 billion commitment to OpenAI, alongside plans involving hundreds of billions of dollars in data centre 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,” said Bloomberg Intelligence analyst Kirk Boodry.
These investments have raised concerns among some investors about whether SoftBank could be stretching its financial resources too far in pursuit of its AI ambitions.
The expected contribution of ABB’s robotics business to SoftBank’s revenue and profits was viewed by some investors as a potential source of financial support for its expanding AI investments.
The Chinese government's intervention has now introduced fresh uncertainty into the company's expansion plans.
Beijing’s decision reflects its increasing focus on protecting sensitive data, technology and strategic assets as artificial intelligence becomes central to global economic and technological competition.
The move follows China's intervention in Meta Platforms' proposed $2 billion acquisition of Manus, an agentic AI startup, in April.
At the time, China's National Development and Reform Commission (NDRC) issued a notice prohibiting foreign investment in the startup under applicable laws and regulations.
SoftBank's proposed acquisition of ABB's robotics business also underwent a foreign investment security review by Chinese authorities, according to an earlier report by the Financial Times.
ABB confirmed that China's Office of the Working Mechanism for Foreign Investment Security Review had prohibited the transaction.
China's tighter restrictions come as industrial data becomes increasingly important for developing advanced AI-powered robots.
Japan is home to several leading industrial robotics manufacturers, including Fanuc, Yaskawa Electric and Kawasaki Heavy Industries.
These companies have partnered with US chipmaker Nvidia to explore applications of artificial intelligence in factories, hospitals and logistics networks.
Their efforts are aimed at strengthening Japan's position in the global robotics industry and maintaining competitiveness as Chinese manufacturers expand their presence in the rapidly evolving market.
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