China Blocked SoftBank's $5.4 Billion ABB Robotics Deal Over Fear the Data Would Train OpenAI

Masayoshi Son wanted ABB's factory robots to prove that SoftBank's "physical AI" pitch could make real money. Beijing just took a large bite out of that plan.

China's foreign investment security review office has prohibited SoftBank's acquisition of the ABB Robotics business in China, ABB said on Thursday. The prohibition hits a deal that valued the whole robotics division at $5.375 billion when the two companies signed it in October 2025.

Why Beijing said no

China did not publish its reasons beyond the prohibition itself. But people familiar with the review say officials worried that robotics data would be transferred overseas, where it could be used to train AI models, including those developed by OpenAI, in which SoftBank is a major investor. SoftBank has not confirmed that account and declined to comment.

The China piece is not a side business. China is ABB's biggest robotics market, about 30% of its robot-related business. More than 90% of the robots sold to Chinese customers are built locally, and ABB has run a $150 million robot factory in Shanghai since 2022. Its global robotics headquarters sits there too.

SoftBank, which handled the regulatory approvals, had expected a green light until last week. The European Commission cleared the deal without conditions in March, and completion had been aimed at mid to late 2026. A spin-off of parts of the business to Chinese owners had also been considered at one point.

A bad day for Son's hardware bet

Investors did not take it well. SoftBank shares fell around 7% in Tokyo, with weak guidance from its chip designer Arm adding to the pressure. ABB slipped 1.1% in morning trading.

The reaction makes sense once you see how much SoftBank has riding elsewhere. It has a bet of nearly $65 billion on OpenAI and has pledged hundreds of billions to data center projects. ABB Robotics, with more than 7,000 employees, customers like BMW and about $2.3 billion in 2024 revenue, was supposed to be the steady earner that showed SoftBank was not overextending.

Bloomberg Intelligence analyst Kirk Boodry put it plainly. ABB Robotics "lacks the cutting-edge innovation found across SoftBank's physical AI startup portfolio," he said, "but its domain expertise and manufacturing knowhow had been expected to transform robotic concepts into actual businesses."

Robots are strategic now

The block fits a pattern. In April, China's planning agency stopped Meta's roughly $2 billion purchase of the agentic AI startup Manus. Relations between Beijing and Tokyo have also been tense since Japanese Prime Minister Sanae Takaichi's comments on Taiwan last November, though that was not given as a reason here.

Governments on both sides of the Pacific now treat industrial robots as strategic kit rather than plain factory gear, from Beijing guarding robot data to Washington, where Trump declared foreign robot imports a national security threat last week.

The deal is not dead yet. ABB says the two companies "are in close dialogue and are working constructively on the transaction," and SoftBank is weighing whether it can seek approval again. ABB would not say what the ruling means for the rest of the sale.

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