China has blocked the acquisition of ABB’s robotics operations in the country by Japan’s SoftBank Group, creating a major setback for the Japanese conglomerate’s $5.375 billion plan to acquire the Swiss-Swedish engineering company’s global robotics business. ABB confirmed that it had been informed by SoftBank that China’s Office of the Working Mechanism for Foreign Investment Security Review had prohibited the acquisition of its robotics business in China. The two companies said they remain in close discussions over the transaction.
The decision threatens a deal central to SoftBank founder Masayoshi Son’s ambition to build a major business around physical artificial intelligence (AI), which combines AI software with robots and machines operating in the physical world. China is ABB Robotics’ largest market, accounting for approximately 30% of the division’s business. The regulatory intervention raises questions about whether the acquisition can proceed in its original form, particularly because the Chinese operations were an important part of the business SoftBank wanted to acquire.
China Blocks Acquisition on National Security Grounds
The decision was communicated through China’s foreign investment security review mechanism, according to ABB’s November 5 statement. The Financial Times reported that China’s National Development and Reform Commission (NDRC) had informed SoftBank that the acquisition would not be allowed to proceed.
The transaction had already cleared China’s competition review in February 2026. However, it subsequently faced a separate foreign investment security assessment, which examined the implications of transferring control of a strategically important technology business to a foreign buyer.
According to people familiar with the review cited by the Financial Times, Chinese regulators examined ABB Robotics’ local supply chains, manufacturing capabilities and intellectual property. Concerns reportedly included the possibility that robotics-related data could be transferred outside China and used to train AI models.
These concerns are significant because industrial robots generate information about manufacturing processes, equipment performance, production environments and automated operations. Such information can have commercial and strategic value, particularly as AI systems become more closely integrated with industrial machinery.
Neither the Chinese regulator nor ABB has publicly provided a detailed explanation of the decision. The reported concerns should therefore be understood as information attributed to people familiar with the review, rather than an official statement of the government’s reasoning.
Why ABB Robotics Was Important to SoftBank
SoftBank announced its agreement to acquire ABB’s robotics business on October 8, 2025, for an enterprise value of $5.375 billion.
The acquisition was intended to strengthen SoftBank’s position in industrial automation and AI-powered robotics. Son has repeatedly described physical AI as a major opportunity, arguing that the next stage of artificial intelligence will involve systems capable of interacting with and performing tasks in the physical world.
ABB Robotics offered SoftBank an established industrial business rather than a technology platform that still needed to prove its commercial viability.
The division manufactures industrial robots, robotic arms and automation systems used in manufacturing facilities. Its customers include major industrial companies, and its technology is deployed in applications such as automotive production, material handling, assembly and other factory operations.
SoftBank planned to combine ABB’s industrial robotics expertise, customer relationships and manufacturing capabilities with its investments in AI, robotics software and next-generation computing.
In its original acquisition announcement, SoftBank said the transaction would complement its existing robotics-related investments, including Berkshire Grey, AutoStore, Agile Robots and Skild AI.
The broader objective was to connect advanced AI systems with machines that can perform practical tasks in factories, warehouses and other industrial environments.
China Represents a Major Part of ABB’s Robotics Business
China’s importance to ABB Robotics makes the regulatory decision particularly consequential.
The country is the division’s largest market, representing around 30% of its robotics business, according to reporting by Reuters. The Financial Times also reported that more than 90% of the robots ABB sells to Chinese customers are manufactured locally.
ABB has a substantial manufacturing and research presence in the country. Its Shanghai robotics factory, which opened in 2022 following an investment of approximately $150 million, includes manufacturing facilities and research capabilities focused on automation and robotics technology.
The company employs thousands of people in China across its operations. The Financial Times reported that ABB has approximately 12,700 employees in the country.
This presence gives ABB access to one of the world’s largest industrial automation markets. It also means that separating the Chinese business from the rest of the robotics division could involve complicated questions about production, intellectual property, employees, customers and supply chains.
The Chinese operations were reportedly a significant attraction for SoftBank. A transaction that excludes or substantially restructures those operations could therefore look very different from the acquisition originally announced.
The $5.375 Billion Deal: What SoftBank Planned to Buy
Under the agreement announced in October 2025, ABB planned to carve out its robotics division into a newly established holding company. SoftBank intended to acquire all shares in that holding company.
ABB’s original financial disclosures provide an indication of the division’s scale.
| Financial metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $2.258 billion | $2.452 billion | $2.279 billion |
| EBITDA | $221 million | $385 million | $313 million |
| Operational EBITA | $186 million | $349 million | $277 million |
Figures were provided by ABB on a pro forma, unaudited basis in SoftBank’s acquisition announcement.
The division generated $2.279 billion in revenue and $313 million in EBITDA in 2024. Its established customer base and industrial manufacturing capabilities made it an attractive addition to SoftBank’s robotics strategy.
The original agreement was subject to regulatory approvals in several jurisdictions, including China, the European Union and the United States. SoftBank had expected the transaction to close in mid-to-late 2026.
China’s decision now creates uncertainty around that timeline and the structure of the acquisition.
SoftBank’s Physical AI Strategy Faces a Setback
The acquisition was intended to give SoftBank a stronger foundation in physical AI, a field that could become an important part of the next generation of industrial automation.
Traditional industrial robots generally perform programmed tasks such as welding, painting, assembly and moving materials. AI-powered robotics aims to make machines more adaptable by allowing them to process information, respond to changing environments and perform tasks with greater autonomy.
SoftBank wants to connect AI models, computing infrastructure and robotic hardware to develop systems that can operate in real-world environments.
ABB’s technology and industrial customer relationships could have provided an established route into this market. Without the Chinese operations, SoftBank may have to reconsider how it obtains the manufacturing scale and market access it originally expected from the deal.
The setback also comes as SoftBank is making substantial investments in AI infrastructure and companies. Its investment in OpenAI is a central part of its broader AI strategy, making the relationship between AI software, computing infrastructure and physical automation particularly relevant.
Reuters reported that SoftBank shares fell approximately 6.8% on November 5 following the development. The market reaction reflects investor concern about the uncertainty surrounding a strategically important acquisition, although share-price movements can have multiple causes.
Can SoftBank and ABB Restructure the Transaction?
ABB said it had been informed that the acquisition of its robotics business in China had been prohibited. It also confirmed that it and SoftBank remain in close dialogue and are working constructively on the transaction.
This leaves open the possibility of further discussions about the deal’s structure, although neither company has announced a revised agreement.
One potential challenge would be separating the Chinese operations from the rest of ABB Robotics. Such a restructuring could require decisions about manufacturing facilities, technology ownership, employees, customer contracts and intellectual property.
Another possibility would be seeking further regulatory engagement, although it is not clear whether China would reconsider its decision or what conditions might be acceptable.
SoftBank’s original transaction was designed to acquire the entire robotics business, not simply selected operations outside China. Any alternative structure would therefore need to address how the remaining business could operate commercially without the Chinese assets.
The Bigger Picture: Robotics Is Becoming a Strategic Technology
China’s decision highlights how industrial robotics is increasingly being treated as a strategically important technology rather than simply another manufacturing business.
Robotics combines hardware, software, sensors, industrial data and AI. Control over these capabilities can influence manufacturing productivity, supply-chain resilience and future industrial competitiveness.
For governments, foreign ownership of robotics businesses can raise questions about data security, technology transfers and the location of critical manufacturing capabilities. These concerns are becoming more prominent as AI systems increasingly depend on real-world operational data.
The decision also follows China’s intervention in Meta’s proposed acquisition of AI startup Manus earlier in 2026. Together, the cases illustrate the additional scrutiny foreign investors can face when attempting to acquire businesses operating in strategically sensitive technology sectors.
Looking Ahead
The immediate priority for SoftBank and ABB will be determining whether the original transaction can be modified or whether an alternative structure can satisfy regulatory requirements. The companies have not announced that the global sale has been cancelled, but the prohibition affecting the Chinese business creates a substantial obstacle. Any revised arrangement would need to address the importance of China’s market, manufacturing operations and technology assets to ABB Robotics.
For SoftBank, the outcome will influence how quickly it can expand its physical AI ambitions through established industrial technology. For the wider technology industry, the case is another indication that cross-border acquisitions involving AI, robotics and sensitive industrial data can face scrutiny beyond conventional competition reviews. As AI and automation become more closely connected to national industrial strategies, regulatory approval is likely to remain a major consideration in global technology deals.
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