China has blocked SoftBank Group's planned $5.4 billion purchase of Swiss engineering group ABB's robotics business, a setback for SoftBank founder Masayoshi Son's push into what he calls physical AI. ABB confirmed the decision on 5 November 2026. The case turns on a question that is becoming central to AI: who owns the data that trains robots, and whether it can leave the country where it was collected.
What was decided
ABB said in a statement that SoftBank had informed it that the Office of the Working Mechanism for Foreign Investment Security Review in China had prohibited the acquisition of the ABB Robotics business in China. SoftBank said the office, which sits under China's National Development and Reform Commission, had blocked the deal, and that the two companies were in discussions and seeking a way forward. SoftBank agreed in October 2025 to buy the division for about $5.4 billion, and the European Commission had cleared it in March. The Financial Times, which first reported the decision, said the deal had been expected to proceed until last week.
Why China is reported to have objected
According to the Financial Times and outlets that followed it, Chinese authorities were concerned that robot-related data and assets could be transferred overseas and used to train AI models. Sources cited by Silicon Republic said that included models from OpenAI, a major part of SoftBank's investment portfolio. No formal notice from the commission had been published, sources did not say what type of data worried regulators, and neither company has said the deal is over, according to 24/7 Wall St.
Why the data matters
Physical AI is the use of AI in robots and other machines that operate in the real world. These systems learn from data produced by robots doing real work, such as welding, picking parts and painting. ABB Robotics employs about 7,000 people across China, the US and Sweden, and reported $2.3 billion in revenue in 2024. China hosts the unit's headquarters, R&D and factories, and is its largest market. Bloomberg Intelligence analyst Kirk Boodry said ABB Robotics offered the industrial know-how that would turn SoftBank's robotics concepts into real businesses.
A pattern in China's approach
24/7 Wall St. noted that China also blocked Meta's roughly $2 billion purchase of the AI start-up Manus in April, a sign that Beijing treats AI-related data and technology as a national security asset. Other governments apply their own versions of such reviews to foreign deals, so the case is part of a wider trend in which countries restrict where sensitive technology and data can go.
What happens next
SoftBank could still buy parts of the business outside China, renegotiate the terms or restructure the deal, but the China operations were a major attraction. Observers will watch for a formal notice from the regulator, statements from SoftBank and ABB, or a revised agreement. For companies and governments elsewhere, including in Africa, that are deciding how to handle data collected by robots, sensors and industrial machines, the episode is a reminder that where the data is stored and who can use it for AI training is now a negotiating point in major deals.
Sources: ABB and SoftBank statements, as reported by Bloomberg, The Japan Times and The Business Standard; Financial Times via TradingView and Silicon Republic; 24/7 Wall St.; BigGo Finance; Forbes.
