SoftBank takeover of ABB robotics unit blocked in China

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SoftBank ABB robotics deal blocked

Highlights

China's National Development and Reform Commission blocked SoftBank's planned $5.4 billion acquisition of ABB’s robotics division over supply chain security concerns.
SoftBank's deal passed antitrust review in February but failed a later security review focused on the transfer of Chinese-developed assets and data to a Japanese buyer.
SoftBank shares have fallen 38 per cent in the past month and 28 per cent over the past year, amid growing AI investment headwinds and OpenAI IPO delays.

Security review centers on Chinese assets

As first reported by Financial Times, China has told SoftBank that its planned $5.4 billion acquisition of ABB’s robotics division will not be allowed to proceed, according to multiple people familiar with the matter.

SoftBank was recently informed that the deal would be blocked by the National Development and Reform Commission, the state planning body responsible for supply chain security and stability. Until last week, people close to SoftBank and others briefed on the process had expected approval, even after the transaction moved beyond competition clearance into a foreign investment security review.

SoftBank agreed last October to buy the ABB business as part of a broader push into robotics linked to the rise of AI. The deal cleared China’s antitrust review in February, but the later security review highlighted Beijing’s concern over transferring assets developed in China to a Japanese buyer during a period of strained ties with Tokyo and strategic competition with Washington.

The review included detailed examination of ABB’s Chinese supply chains and requests to keep some manufacturing capability in China, people familiar with the matter said. Officials were also concerned that robotics data could be transferred overseas and used to train AI models, including those developed by OpenAI, in which SoftBank is a major investor.

Impact on SoftBank strategy and ABB’s China footprint

For SoftBank, ABB’s robotics unit is a key part of founder Masayoshi Son’s strategy in physical AI, and its operations in China were a major attraction of the proposed deal. The group is now trying to determine what went wrong and whether it can seek approval again.

China is the biggest market for ABB’s robotics business, with more than 90 per cent of robots for Chinese customers made locally. ABB employs about 12,700 people in China, and Shanghai authorities helped the company build its $150 million robotics mega-factory in Pudong, which began operating in 2022.

ABB entered China through a joint venture in 1992, and its local robotics operations have long benefited from government backing. People close to SoftBank said there was still uncertainty in Japan in the days before the decision over which conditions were being formally sought by Chinese authorities.

The setback comes as SoftBank faces wider pressure around its AI investment case. Its shares have fallen 38 per cent in the past month and 28 per cent over the past year amid concerns over AI demand and OpenAI’s decision to push its IPO into next year. The NDRC does not immediately reply to a request for comment.

The debate over AI safety coordination between the U.S. and China has been intensifying as governments and leading developers consider stronger safeguards for advanced systems. Our publication previously noted that officials discussed creating a U.S.-China channel for AI-related incidents with potential national-security implications, while industry leaders argued for broader international dialogue, including a possible coordinating role for the UK.

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