China blocks SoftBank's $5.4 billion acquisition of ABB Robotics

China has blocked Japanese technology investment giant SoftBank Group's $5.4 billion acquisition of ABB's robotics business, dealing a setback to the company's ambitions to expand its presence in artificial intelligence-powered robotics, AFP reported.

SoftBank said on Friday that it had received notification from Chinese regulators on Wednesday prohibiting the acquisition of ABB Robotics' business in China. The company and ABB are continuing to work towards the transaction, AFP reported.

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The acquisition was positioned as a key part of SoftBank's strategy to strengthen its presence in the rapidly expanding AI and robotics industry. SoftBank is also a major investor in OpenAI, the creator of ChatGPT.

ABB Robotics specialises in industrial automation equipment, including large robotic arms capable of performing precise movements in manufacturing facilities. The business employs around 7,000 people and generated revenues of $2.3 billion in 2024, accounting for approximately 7% of ABB Group's total income.

China is ABB Group's second-largest market, with more than 90% of its sales in the country coming from locally manufactured products and services.

The regulatory decision comes amid strained diplomatic relations between Beijing and Tokyo, as China steps up scrutiny of artificial intelligence and other strategically sensitive technologies.

ABB had earlier informed investors of SoftBank's notification regarding the regulatory block. The Swiss-Swedish engineering group had previously planned to spin off its robotics division into a separately listed company before agreeing to sell the business to SoftBank.

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China tightens scrutiny of AI deals
The decision is the latest instance of Beijing intervening in major artificial intelligence-related transactions. In April, Chinese authorities blocked Facebook parent Meta Platforms' acquisition of AI startup Manus following a regulatory review.

Manus develops an AI agent capable of carrying out real-world tasks. The decision was viewed by analysts as a sign of China's growing oversight of its artificial intelligence sector amid intensifying technological competition with the United States, AFP reported.

China has increasingly emerged as a major player in advanced robotics, widely seen as the next frontier of the AI boom. The sector has attracted growing investor interest as companies develop machines capable of performing increasingly complex tasks.

Robots are also becoming more visible in everyday life across China, with experimental deployments involving traffic management, household cleaning and factory operations.

SoftBank's proposed acquisition of ABB Robotics was expected to strengthen its position in this expanding market. China's regulatory intervention, however, raises fresh questions about the challenges facing cross-border investments in strategically important AI and robotics technologies.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)