SoftBank sinks 11% as China blocks its $5.4B ABB robotics deal

SoftBank Group's stock slid 11.13% early Friday, trading at ¥3,538 as a Wall Street rout spilled over into Asian equities. The drop caps a brutal month for the Japanese investment giant: its shares have now plunged more than 45%.

The pain deepened a day earlier when China's National Development and Reform Commission blocked SoftBank's $5.4 billion deal for ABB's robotics division, according to the Financial Times, which cited people familiar with the matter. Regulators reportedly flagged worries about Chinese supply chains, intellectual property and the transfer of robotics data overseas for AI training. The deal had already cleared a competition review back in February, making the rejection sting more.

ABB said it remains in close contact with SoftBank on the transaction, even as the takeover hangs in limbo. Neither company has signaled how — or whether — the deal can be salvaged.

The bigger weight on SoftBank may be OpenAI. The group has poured $64.6 billion into the AI company for a stake of nearly 13%, and reports of disappointing September revenue — approaching $50 billion against expectations of $70 billion — have rattled investors worried about the strength of AI demand.

SoftBank's OpenAI ties go both ways. Nvidia and SoftBank together put in $20 billion in the ChatGPT maker's final funding round, the last slice of their separate $30 billion commitments, according to The Information. OpenAI's blockbuster round was valued at $852 billion in March.

Meanwhile, founder and CEO Masayoshi Son is chasing fresh capital, hoping to raise $100 billion from Gulf investors including senior figures in the United Arab Emirates, the Financial Times reported. The plan: a fund that buys companies and uses AI to revamp their operations.