China blocks SoftBank’s $5.4b ABB robotics deal

China has blocked a $5.4 billion takeover of ABB's robotics unit by SoftBank Group, according to a statement from the Japanese investment firm. The deal, which was widely anticipated to strengthen SoftBank's revenue and profits as it awaits benefits from OpenAI's public launch, was halted by a Chinese government agency. SoftBank's shares fell approximately 7% in Tokyo on Thursday, and a company spokesperson declined to provide additional comment.

SoftBank co-founder Masayoshi Son had identified the acquisition as a crucial component of his strategy to enhance his involvement in artificial intelligence development. The Japanese conglomerate sought to acquire ABB, a business with over 7,000 employees that manufactures robotic arms and industrial machinery for clients such as BMW.

Investors expressed concern over Son's commitments to AI, particularly after SoftBank's significant investment in OpenAI and substantial expenditures on data center projects. Bloomberg Intelligence analyst Kirk Boodry noted that ABB Robotics lacked the advanced innovation present in SoftBank's physical AI startup portfolio, but its expertise and manufacturing knowledge were expected to convert robotic ideas into viable businesses.

China's decision to block the ABB deal adds further ambiguity to SoftBank's aspirations, highlighting the Chinese government's growing focus on protecting its data and technology in the AI era. In April, China's National Development and Reform Commission rejected Meta Platforms' $2 billion acquisition of agentic AI startup Manus, citing compliance with laws and regulations.

SoftBank's acquisition similarly underwent a foreign investment security review by the state planner, as reported by the Financial Times. China has been increasingly restrictive in recent years regarding the transfer of crucial information abroad, including in the robotics sector where data is essential for robots to function effectively.

Japan is home to some of the world's leading industrial robot manufacturers, including Fanuc, Yaskawa Electric, and Kawasaki Heavy Industries, many of which are collaborating with Nvidia to explore AI applications in various industries.