Chinese Regulators Block SoftBank's $5.4 Billion Acquisition of ABB Robotics Division

Chinese regulators blocked a robotics business expansion plan worth on the order of several billion dollars by Japanese tech giant SoftBank, showing Beijing's willingness to intervene in global commercial transactions that might affect its own technological development ambitions.

On Thursday, the Swiss-Swedish industrial company ABB stated, the deal announced last year to sell its robotics division to SoftBank for 5400000000 USD was vetoed by a Chinese regulatory body responsible for conducting national security reviews on foreign investments.

SoftBank's acquisition required Chinese approval, partly because a large portion of ABB's sales revenue comes from China. ABB has a factory in Shanghai, producing a variety of products, mainly used for manufacturing, as well as automation for heavy material handling, polishing, and other operations.

China is taking a firmer approach to reviewing foreign enterprise transactions involving key technologies and sensitive industries. In April this year, the regulator forced Meta to withdraw its 2000000000 USD deal to acquire the Chinese artificial intelligence startup Manus.

In blocking the Manus acquisition, Chinese authorities took action citing national security issues. Outsiders believe this move indicates the Chinese government's determination to prevent important technologies and excellent engineering talent from being acquired by foreign enterprises.

As the strategic status in government planning becomes increasingly prominent with technological developments, China's strict scrutiny of transactions involving foreign enterprises has also caused companies to have more concerns about operating in China. Regulatory bodies in the United States, the European Union, and the United Kingdom have also intervened in transactions involving semiconductor, quantum computing, and other technological fields.

ABB is headquartered in Zurich and has had connections with Chinese manufacturing enterprises for decades, and therefore is able to obtain valuable robotics technology data. China is ABB's largest robotics business market, and approximately 90% of the machines the company produces for Chinese customers are manufactured locally. ABB employs thousands of employees in China.

According to the first report that this transaction was vetoed The Financial Times It is said that Chinese authorities are concerned that robot-related data is being transferred overseas to be used for training artificial intelligence models.

China's intervention is a major blow to SoftBank and its founder Masayoshi Son, who is one of the most steadfast supporters of artificial intelligence in the tech industry. He has staked the company's future on this technology and believes that robots are the key link connecting artificial intelligence with the real physical world.

However, there is growing outside concern that Masayoshi Son is over-betting on artificial intelligence. SoftBank has already invested approximately 65000000000 USD in OpenAI, the developer of ChatGPT, and has invested on the order of several billion USD in data center businesses.

On Thursday, SoftBank's stock price fell by nearly 7%, with a cumulative decline of nearly 30% over the past year. The Democrats' comprehensive victory in the U.S. midterm elections on Tuesday also dragged down the stock prices of some large tech companies, because many winning governors and lawmakers have consistently advocated Strengthen supervision of artificial intelligence infrastructure construction, which may slow down the expansion pace of related projects.

A SoftBank spokesperson did not respond to requests for comment.

Follow Jasmine Flower on Telegram