China has told SoftBank Group it will not allow the Japanese investor’s $5.4 billion acquisition of ABB’s robotics division to go ahead, the Financial Times reported on Thursday, citing multiple people familiar with the matter. The reported block is a major setback for SoftBank chief executive Masayoshi Son’s push into what he calls physical AI, the combination of artificial intelligence with machines that act in the real world.

According to the report, SoftBank was informed of the decision by China’s National Development and Reform Commission (NDRC), the country’s top economic planning agency. The FT said SoftBank had expected the deal to be approved until last week, and is now assessing what went wrong and whether it can seek approval again. The grounds for the decision were not disclosed.

Why China objected, according to the report

The NDRC was concerned about robotics data being transferred overseas, where it could be used to train AI models, including those developed by OpenAI, in which SoftBank is a major investor, the FT report added. That concern carries particular weight because China is ABB’s biggest robots market, representing around 30% of the division’s robots business.

One important caveat: Reuters, which relayed the FT report, said it could not immediately verify the report. SoftBank and ABB did not respond to Reuters’ requests for comment, and China’s NDRC could not be reached. Neither company has publicly confirmed the block, so the story currently rests on the FT’s sourcing rather than an official announcement.

What was agreed last year

SoftBank agreed in October 2025 to buy 100% of ABB’s robotics business for an enterprise value of $5.375 billion, ABB announced at the time. The deal replaced ABB’s earlier plan to spin the division off as a separately listed company, and was expected to close in mid-to-late 2026 subject to regulatory approvals.

The European Commission cleared the deal without conditions in March, while approvals from China and the United States were still pending as of late October. The unit employs around 7,000 people and generated about $2.3 billion in revenue in 2024, roughly 7% of ABB’s group total, according to reports of the deal.

Key facts on the blocked SoftBank ABB robotics deal
Key facts on the reported block. Graphic: GPTOnline.

Why it matters

Son had made robotics a central plank of SoftBank’s AI strategy. “SoftBank’s next frontier is physical AI,” he said when the deal was announced, and the ABB business was meant to complement SoftBank’s existing robotics investments, including SoftBank Robotics Group, Berkshire Grey, AutoStore, Agile Robots and Skild AI.

The reported block also shows how data, not just market share, is now a deal-breaker in cross-border technology mergers. Factory robots generate detailed operational data from production lines, and regulators appear increasingly unwilling to let that data flow to foreign owners who could use it to train competing AI systems. For ABB, the robotics unit stays on its books, and investors are likely to focus on whether the company revives a separation plan if the sale cannot be rescued.

SoftBank shares fell about 5% in Tokyo on Thursday, though the stock was already under pressure from a slide in Arm Holdings, its chip-design unit, and a broader selloff in AI-linked stocks after Democrats won control of both chambers of Congress in the US midterms.

Quote from SoftBank chief executive Masayoshi Son on physical AI
Masayoshi Son has called physical AI SoftBank’s next frontier. Graphic: GPTOnline.

The next steps to watch are responses from SoftBank and ABB, and whether a renewed application or remedies can rescue the deal. Until either company speaks, the block remains a report, not a confirmed regulatory decision, but the market reaction suggests investors are taking it seriously.

Sources