China has told SoftBank it will not be allowed to buy ABB's robotics division, throwing a $5.4bn deal into doubt and handing the Japanese group a setback in its push into what its chief executive calls physical AI. ABB confirmed the news on Thursday. The Financial Times was first to report it.

What ABB has confirmed

In October 2025 ABB agreed to sell its Robotics division to SoftBank Group for an enterprise value of $5.375bn. The deal was always subject to regulatory approvals, and ABB says SoftBank was the party managing that process. In a short statement on 5 November, ABB said SoftBank had told 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.

The wording matters. ABB's statement refers to the business in China, and it stops short of saying the whole deal is dead. ABB added that it and SoftBank are in close dialogue and working constructively on the transaction. It did not say how the prohibition changes the timetable or the structure of the sale.

What the reports add

Reuters, citing the FT, says the decision came from China's National Development and Reform Commission (NDRC), the state planner that reviews foreign investment with possible national security implications. According to the FT, SoftBank had expected the deal to be approved until last week, when it was told the NDRC had prohibited it. SoftBank declined to comment, and the NDRC did not immediately respond to Reuters' request for comment.

The reported concern is data. The FT says the NDRC worried that robotics data could be sent overseas and used to train AI models, including those built by OpenAI, in which SoftBank is a major investor. The grounds have not been set out officially, so that explanation rests on the FT's sources rather than on any Chinese announcement. Asked about the report at a regular briefing on Thursday, a Chinese foreign ministry spokesperson said the question should be put to the relevant Chinese authorities.

Why China matters so much to ABB Robotics

China is ABB's biggest robotics market, accounting for around 30% of its robot-related business, according to Reuters. The company operates about 30 local companies there, with roughly 15,000 employees in nearly 130 cities, and ABB Engineering (Shanghai) is home to its global robotics headquarters as well as an important research and production base. A buyer that cannot take over the China operations would be buying a very different business from the one it signed up for.

That is why a block on the Chinese part of the deal is a big problem rather than a technicality. It leaves open several outcomes: SoftBank could seek approval again, the parties could restructure the sale around the China business, or the deal could change in some other way. None of those has been announced, and we are not going to guess which is most likely.

A second big deal blocked this year

Reuters notes this is the second major deal China has stopped this year. Earlier in 2026 the NDRC ordered Meta to unwind its acquisition of the AI start-up Manus, a deal worth more than $2bn. Together the two cases point to Beijing tightening its scrutiny of foreign investment in technology it regards as strategically important, particularly where data and AI training are involved.

Politics may also be in the background. Reuters points out that China and Japan have been in a diplomatic dispute since Japanese Prime Minister Sanae Takaichi's comments on Taiwan last November, and that China has since severely limited exports of critical minerals to Japan. Neither ABB nor SoftBank has linked the decision to that dispute, and the reports do not say it played a part.

The market reaction

SoftBank's shares were already down about 5% before the FT published its report and ended the day down 6.8%, according to Reuters. That fall came in a day of wider market moves, so it should not all be put down to the ABB news.

Why it matters for robotics

For SoftBank, robotics is meant to be a core part of its AI investment strategy. Buying one of the world's best-known industrial robot makers would have given it factory-floor hardware, customers and a large installed base to go with its AI holdings. The Chinese ruling restricts that ambition, at least in its original form.

For the wider industry, the case is a reminder that robots are no longer treated as just machinery. Regulators increasingly see them as data-gathering devices, and the information they collect on factory floors, in warehouses and eventually in homes is exactly the kind of material that could be used to train AI systems. Any large cross-border robotics deal now has to clear a security test as well as a competition one. The European Commission reportedly cleared this deal without conditions in March, which shows how different those two hurdles can be.

It also raises a practical question for any buyer of a global manufacturer: how much of the business can be separated from its largest market without losing the value that made it attractive. ABB has not said whether the Chinese operations could be carved out, and the reports do not say either.

What to watch next

  • Whether SoftBank and ABB announce a revised structure, a fresh application or a longer timetable.
  • Whether the NDRC or China's foreign investment security review office publishes its reasons.
  • Whether ABB's own plans for the robotics division change if the sale cannot be completed as agreed.

We will update this story if ABB or SoftBank says more. Neither company has said anything further at the time of writing.

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