China has blocked SoftBank Group's $5.4 billion takeover of ABB's robotics division, ABB confirmed on Thursday, after the Financial Times reported that Beijing feared data from the Swiss company's robots could leave the country and be used to train artificial intelligence models.

The decision cuts off one of the biggest bets in Masayoshi Son's push to make SoftBank a central player in AI, and it shows that China's foreign investment review now reaches deals between two non-Chinese companies when the target has a large business in China. For investors in Asian robotics and AI, the message is that industrial data generated on Chinese factory floors is being treated as a strategic asset.

What Beijing objected to

China's Office of the Working Mechanism for Foreign Investment Security Review has prohibited the acquisition in the country, ABB confirmed to The Robot Report. Reuters, in a report carried by The Standard, said the FT named the National Development and Reform Commission (NDRC), China's state planner, as the agency blocking the deal. The NDRC reviews foreign investment that may have national security implications.

The NDRC was 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, the FT reported, citing multiple people familiar with the matter. SoftBank had expected the deal to be approved until last week, according to the newspaper.

ABB said it and SoftBank are "in close dialogue and are working constructively on the transaction," The Robot Report said. SoftBank declined to comment to Reuters. The NDRC could not be reached, Reuters said.

SoftBank shares, which were already down about 5% in Tokyo on Thursday, were little changed after the FT report, according to Reuters.

Why China has a veto over a Swiss-Japanese deal

China is ABB's biggest market for robots, representing around 30% of the robotics business, Reuters reported. ABB runs around 30 local companies in China with about 15,000 employees, and its Shanghai operation houses the group's global robotics headquarters as well as a research and production base.

About 90% of the machines ABB builds for Chinese customers are made locally, and the division's business in China grew 32% in the third quarter of 2026, The Robot Report said. That footprint means a sale cannot close without Chinese clearance, even though the buyer is Japanese and the seller is based in Zurich.

SoftBank agreed to buy the unit on Oct. 8, 2025. At the time, ABB said it expected about $5.3 billion in cash proceeds and a closing in mid-to-late 2026. The division had about 7,000 employees and sales of $2.3 billion the previous year, roughly 7% of ABB's total revenue, The Standard reported then. The sale replaced ABB's earlier plan to spin off and separately list the business.

ABB Chief Executive Morten Wierod said when the deal was announced that the two companies shared the view that the world was "entering a new era of AI-based robotics."

A pattern in China's deal reviews

The ruling is the second high-profile intervention by the NDRC this year in AI-related deals. Earlier in 2026, the agency ordered Meta Platforms to unwind its acquisition of Manus, an AI startup founded in China that later moved to Singapore, in a deal valued at more than $2 billion, Reuters reported.

Robotics has also drawn scrutiny in the United States. The Robot Report noted that the U.S. secretary of commerce has submitted a Section 232 report on the national security effects of imports of robotics and industrial machinery, and that the Federal Communications Commission has barred new foreign-made advanced robotic devices such as humanoids and quadrupeds.

For SoftBank, the setback comes as it pours capital into AI, including its investment in OpenAI and a $50 billion AI and data center push in Malaysia. The ABB purchase was announced as a major push by Son into robotics.

Neither company has said whether the deal will be restructured or abandoned. ABB said the talks with SoftBank are continuing, and investors will look for detail when SoftBank next reports results.