SoftBank and ABB Consider Excluding China From Robotics Deal After Beijing Security Review Blocks It

Beijing has used its foreign-investment security review to stop a major Japanese acquisition of a European company. SoftBank and ABB are considering removing the China business from SoftBank's planned $5.4 billion purchase of ABB's robotics division. China's Office of the Working Mechanism for Foreign Investment Security Review, which is housed in the National Development and Reform Commission, prohibited the acquisition of ABB's robotics operations in China. The deal had already cleared China's competition review and EU approval.

Beijing has not published its reasons. The Financial Times, as summarized by other outlets, reported that the reviewers focused on supply chains, manufacturing capacity and intellectual property, and on the risk that robot operating data could be sent abroad and used to train artificial intelligence (AI) models. Reports say China is ABB's largest robotics market, at about 30% of the business. SoftBank shares fell about 7% on the news. Some coverage pointed to diplomatic friction between Beijing and Tokyo, but China has not publicly linked the decision to it.

Tokyo is pursuing the same industries through public spending. The Japanese government picked 28 priority items from a list of 62 products and technologies, including semiconductors and AI, for an investment program of ¥370 trillion. Masayoshi Son, SoftBank's chief executive, had presented the ABB purchase as central to his push into AI-driven physical automation.

China is meanwhile drawing Hong Kong further into its own technology base. At China's international import expo in Shanghai, industry figures described how Hong Kong is deepening ties with the mainland in AI, aviation and professional services. The message is consistent: foreign capital is welcome in China's AI and automation sectors if the data, the know-how and the production capacity stay inside China's jurisdiction.