China blocks SoftBank’s $5.4 billion ABB robot deal over factory data fears

China has stopped SoftBank from buying ABB’s robotics business inside the country, and the worry reported behind the decision has little to do with market share. Beijing’s state planner did not want data gathered by industrial robots on Chinese assembly lines to end up in Japan, where it could help train artificial intelligence models, including those of OpenAI, in which SoftBank is a major investor, according to the Financial Times.

That turns a factory arm, the kind that welds car bodies and packs electronics, into something the Chinese state now guards much like a chip. For the people who build and service those machines in China, and for the manufacturers who buy them, the ruling puts a question to every cross-border robotics deal that a purchase contract cannot settle on its own: who owns what a robot learns on the job?

ABB, the Swiss-Swedish engineering group, said SoftBank had informed it that China’s Office of the Working Mechanism for Foreign Investment Security Review had prohibited the acquisition of the ABB Robotics business in China. Masayoshi Son’s group agreed last year to buy the whole division for an enterprise value of $5.375 billion, after ABB dropped its plan to spin the unit off as a separately listed company. The robotics business had revenue of about $2.3 billion in 2024 and employs roughly 7,000 people worldwide. Son had presented it as the hardware core of what he calls physical AI.

China is the unit’s biggest market, and much of it is already Chinese in all but ownership. More than 90% of the robots ABB sells to Chinese customers are built in the country, many at a $150 million plant in Shanghai’s Pudong district that the city government helped ABB build and that began operating in 2022. ABB employs about 12,700 people in China across its businesses. The review by the National Development and Reform Commission examined ABB’s Chinese supply chains in detail and included a demand that some of the unit’s manufacturing capacity stay in China, the FT reported.

The ban surprised the buyer. The deal had cleared China’s competition review in February, and people close to SoftBank expected the separate security review to pass as well until last week. SoftBank is now trying to work out what went wrong and whether it can apply again, while ABB said the two companies remain in close dialogue and are working constructively on the transaction.

Much remains unclear. ABB’s wording covers only the business in China, and neither company has said whether SoftBank could take the rest of the division without its largest market, or whether that smaller deal would still be worth the agreed price. Beijing has not shown publicly that the sale would have moved data abroad or harmed national security. The decision also echoes an argument Chinese officials reject when Washington makes it: the commerce ministry last month accused the US of overstretching national security in its proposed curbs on outbound tech investment. In April, Chinese authorities also stopped Meta’s purchase of Manus, an AI start-up founded in China that later moved to Singapore, in a deal worth about $2 billion.

For ABB’s customers, carmakers and electronics assemblers among them, nothing changes on the factory floor yet, because the sale had not closed and ABB still owns the Shanghai plant. The prohibition applies to China alone. Buyers of ABB robots in Europe, the Americas and the rest of Asia face no change from this ruling, though their supplier’s future owner is now in doubt.

The sale was expected to close in mid-to-late 2026, a timetable that now looks hard to keep. SoftBank reports results for the six months to September on November 10, the first scheduled moment for the group to say whether it will reapply, restructure the deal or walk away.

Son wanted the arms. Beijing has decided that what they learn on Chinese production lines stays in China.

Tags: China, ABB, industrial robots, Masayoshi Son, SoftBank