China blocks SoftBank’s US$5.4 billion takeover of ABB’s robotics division

China has denied Japanese investment firm SoftBank's US$5.4 billion takeover of ABB's robotics division, according to the Swiss company's announcement on Thursday. This marks the second major deal blocked by China this year, following Meta Platforms' order to unwind its acquisition of AI start-up Manus. Beijing's tightening scrutiny of foreign investment in domestic start-ups developing frontier technologies is the reason behind the decision.

The prohibition was first reported by the Financial Times, with SoftBank expecting the deal to go through until the National Development and Reform Commission (NDRC) informed it last week. The NDRC reviews investments with potential national security implications. SoftBank declined to comment on the matter, while the NDRC did not provide an immediate response to a request for comment.

Concerns arose over robotics data being transferred abroad, potentially used to train AI models, including those developed by OpenAI, of which SoftBank is a significant investor. ABB and SoftBank had been collaborating closely on the transaction, as per ABB's statement. Robotics makes up approximately 30% of ABB's business in China, a market that represents the company's biggest robotics market.

The company operates around 30 local entities in China, employing nearly 15,000 individuals in more than 130 cities, along with online and offline channels in nearly 700 cities. ABB Engineering (Shanghai) serves as the global robotics headquarters and is a crucial R&D center and production hub for the ABB Group.