Beijing Reportedly Feared Chinese Robot Data Could End Up Training OpenAI’s Models. So It Blocked SoftBank’s $5.4 Billion Purchase Of ABB’s Robotics Unit
Beijing's alleged fear of Chinese robot data feeding Western AI has put a multibillion-dollar SoftBank deal in jeopardy. Arm shares are tumbling too, yet the real culprit behind that slide may surprise investors.
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The Financial Times reported on Nov. 5, 2026, citing multiple people familiar with the matter, that China’s National Development and Reform Commission (NDRC), the country’s top economic planner, told SoftBank Group it will not approve its $5.4 billion purchase of ABB’s robotics division. BW Businessworld’s account of the FT report says the regulator is worried that robotics data generated in China could leave the country and help train AI models, “including those developed by OpenAI, in which SoftBank is a major investor.” None of the reports included a statement from SoftBank, ABB or Beijing.
Arm Holdings (NASDAQ:ARM | ARM Price Prediction) is the chip designer SoftBank controls. Its shares traded at $170.23 as of 11:26 AM ET, down 11.25% on the session. Most of that decline traces to Arm’s own quarterly results, released Nov. 4, 2026.
Signed Terms Versus Reported Rejection
The signed and announced part comes from ABB’s Oct. 8, 2025 release. It set an enterprise value (the price for the business including debt) of $5.375 billion for a division with about 7,000 workers and 2024 revenue of $2.3 billion. That was about 7% of ABB Group revenue. ABB expected net cash proceeds of about $5.3 billion, and that money is now in doubt. The deal was “subject to regulatory approvals” and expected to close in mid-to-late 2026. When it was signed, SoftBank said: “SoftBank’s next frontier is Physical AI.”
The rejection and the reasons for it remain unconfirmed. No formal NDRC notice has been published, the sources did not say what kind of data concerned regulators, and nobody has said the deal is ended. Beijing has real leverage here: BW Businessworld, citing the FT, puts China at about 30 per cent of the robotics business.
What Arm Actually Has at Stake
Arm is not a party to the deal. In the quarter, SoftBank’s licensing and design services agreement contributed $209 million of $773 million in license revenue. Management expects that quarterly run rate “to remain around this level.” Nothing reported links that revenue to ABB. Arm’s physical AI royalty revenue grew 50% on automotive and robotics adoption, and Arm receives those royalties no matter who owns the robot maker. The main risk is to the story: a price-to-earnings ratio near 227 partly reflects the market’s belief in SoftBank’s broader AI plans.
Arm’s own numbers explain more of the drop. Revenue reached $1.443B, up 27.1%, but GAAP EPS of $0.12 missed expectations of $0.4756. Investing.com said Arm’s current-quarter guidance underwhelmed.
Why SoftBank’s Slide Has Several Causes
Investing.com put SoftBank’s early decline in Tokyo at 5%, compared with a 0.5% drop in the Nikkei 225. Other reports gave a larger figure. Investing.com also pointed to Arm’s overnight decline and broad selling in tech and AI stocks after the midterm elections, so the robotics news alone does not explain the move.
Fortune reports that China stopped Meta Platforms (NASDAQ:META) from completing its $2 billion deal for AI startup Manus in April 2026. In that case the NDRC said it “decided to block the foreign acquisition of the Manus project and require the parties to unwind the deal.” Beijing is treating AI-related data as a national security asset.
Does the Reported Block Change the Case for Arm?
No. Arm’s royalty and licensing business is untouched, and the decline in its shares reflects its own earnings report. For Arm holders, a more pressing China risk is the U.S. export-control Affiliates Rule, which could take effect on Nov. 10, 2026. Per Investing.com citing the FT, SoftBank is trying to determine what went wrong and whether it can seek approval again.
Three things will settle the ABB question: a formal NDRC notice, statements from SoftBank and ABB, or a revised deal. The Arm read-through only becomes real if Arm’s next earnings report shows SoftBank’s license contribution falling clearly below the $209 million quarterly level.
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AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
