China's state planner has told Japanese investor SoftBank that it will not allow the $5.4 billion acquisition of the robotics segment of Swiss engineering group ABB to go ahead, the Swiss firm said on Thursday, Reuters reported.

Source: Reuters

The prohibition was first reported by the Financial Times on Thursday. SoftBank had expected the deal to go through until it was told last week that China's National Development and Reform Commission (NDRC) had prohibited the acquisition, the report said. The NDRC reviews foreign investment that might have national-security implications.

According to the FT 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.

ABB and SoftBank are in close dialogue and working on the transaction, ABB said. SoftBank declined to comment, and China's NDRC did not immediately respond to a request for comment, Reuters reported.

SoftBank agreed in October last year to buy ABB's robotics business for about $5.375 billion, as chief executive Masayoshi Son sought to establish SoftBank as a core player in what he calls physical AI — robots powered by artificial intelligence. The deal won unconditional EU approval in March, and completion had been planned for mid-to-late 2026.

The case is the second major deal blocked by China this year, after Meta was ordered to unwind its $2-billion-plus acquisition of AI startup Manus — yaani over 200 crore US dollars. The decisions come as Beijing tightens scrutiny of foreign investment in domestic companies developing frontier technologies.

China is ABB's biggest robotics market, representing around 30% of its robot-related business. ABB operates about 30 local companies in China with around 15,000 employees in nearly 130 cities, and its global robotics headquarters sits at ABB Engineering (Shanghai), an important research-and-development centre and production base.

The block also lands amid a diplomatic spat between China and Japan, after comments by Japanese Prime Minister Sanae Takaichi on Taiwan in November last year prompted China to severely limit exports of critical minerals to Japan, Reuters noted.

What happens next: SoftBank is assessing whether it can reapply or restructure the deal around the Chinese operations, according to reports on the FT story, but with China accounting for nearly a third of the robotics business, a version of the takeover without Beijing's approval would be a much smaller prize.