China’s block of SoftBank’s ABB purchase raises supply-chain questions

SoftBank Group CEO Masayoshi Son at the "Transforming Business through AI" event in Tokyo February 03, 2025. Tomohiro Ohsumi / Stringer via Getty Images

China blocked SoftBank’s planned $5.4 billion acquisition of the robotics arm of ABB, a Swiss-Swedish electrification and automation technology firm. The move highlights the growing effects of geopolitical tensions on supply chain strategy.

The news was confirmed in a statement from ABB, which said the Office of the Working Mechanism for Foreign Investment Security Review in China prohibited the deal.

The decision, disclosed last week, derails SoftBank’s expansion into physical AI, which CEO Masayoshi Son previously called the company’s “next frontier.”

Samantha Mou, analyst at Interact Analysis, told TechTarget that data security was likely a motivating factor in blocking the deal.

“As one of China’s top three industrial robot suppliers by revenue, ABB serves major automotive OEMs and electronics manufacturers, giving its robots access to sensitive production processes and client data across key industries,” she said. “Concerns may be amplified by SoftBank’s broader AI ambitions, including its investment in OpenAI, as well as heightened China-Japan diplomatic tensions.”

The move highlights China's growing concerns about data security, technology ownership and the potential transfer of robotics data overseas for AI training, said Linda Sui, founder and principal of Smart Analytics Global.

“China is a leading global robotics manufacturing and supply-chain hub, but it does not dominate all critical components,” she said. “Japan and Europe remain strong in several key technologies, particularly for industrial robots. It is also important to distinguish traditional industrial robots from emerging humanoid robots, as their technologies, supply chains and market dynamics are quite different.”

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