Shares of SoftBank Group (SFTBY) plunged 12% to $11.49 Thursday after China's foreign investment security office formally blocked the company's $5.4 billion acquisition of ABB's robotics division — the centerpiece of CEO Masayoshi Son's bet that the future of AI lives in machines that move, not just think.
• Beijing Blocked the Deal Over Data, Not Price
Chinese regulators prohibited the acquisition of ABB Robotics' China operations, with the Financial Times reporting that officials focused on whether robotics data generated in China could be sent overseas to train AI systems — including ones tied to OpenAI, where SoftBank is a major investor.
This follows Beijing's April decision to kill Meta's $2 billion acquisition of AI startup Manus on similar grounds. The message to foreign buyers is clear: China's industrial data stays home.
• The China Operations Are the Prize SoftBank Can't Easily Replace
China accounts for roughly 30% of ABB Robotics' sales, but it hosts the unit's headquarters, R&D, and factories — the operational core of the business. ABB Robotics employs approximately 7,000 people and includes a $150 million Shanghai factory.
Losing access to ABB's hardware division forces SoftBank to hunt for alternative platforms, and attention now shifts to whether it attempts to carve out ABB's non-China assets or abandons the transaction entirely.
• Son's Entire AI Architecture Was Built Around This Deal
SoftBank positioned the ABB purchase within a strategy spanning AI chips, robots, data centers, and energy, alongside its stated mission to realize artificial superintelligence.
The company had planned a $100 billion spinoff called Roze that would bundle ABB Robotics with AI chip and data-center assets into a "physical AI" platform. Without ABB's manufacturing expertise, Bloomberg Intelligence analyst Kirk Boodry noted ABB Robotics' "domain expertise and manufacturing know-how had been expected to transform robotic concepts into actual businesses." That bridge is now missing.
• The Stock Was Already Sliding — This Accelerates the Damage
SoftBank shares have fallen 38% in the past month amid growing AI investment headwinds and OpenAI IPO delays. Thursday's drop shaved another $11.5 billion off the company's market capitalization. ABB and SoftBank remain in talks and are seeking a solution , but restructuring a deal around a China carve-out would gut the acquisition's strategic value. For shareholders, the question isn't just whether Son can save this deal — it's whether his physical AI thesis has a credible Plan B.