TMTPOST -- Japan’s SoftBank Group has agreed to acquire ABB Group’s robotics division for $5.375 billion, marking a pivotal move in Masayoshi Son’s long-term vision for “physical AI.”

The transaction, announced on Wednesday, is expected to close in the second half of 2026, pending regulatory approval.

SoftBank’s stock surged as much as 13% on the day of the announcement, reflecting investor enthusiasm for the acquisition. Employees at ABB’s China robotics unit, however, voiced mixed emotions on social media, with some jokingly lamenting, “After ten years on the job, we’ve finally become a Japanese company.”

Masayoshi Son emphasized that the acquisition fits into SoftBank’s broader strategy of advancing AI beyond software and into the physical world. “The next frontier for SoftBank Group is physical AI,” Son said in an official statement. Unlike traditional AI algorithms, physical AI integrates intelligent systems into tangible applications, a goal SoftBank hopes to accelerate with ABB’s industrial robotics capabilities.

For ABB, the sale represents a strategic pivot. Earlier this year, the company had planned to take its robotics division public, targeting an IPO in the second quarter of 2026. By September, however, talks with SoftBank had accelerated, leading both boards to approve a full acquisition instead. ABB CEO Björn Rosengren noted, “This divestment will create immediate value for ABB shareholders.”

The deal will see ABB first contribute its robotics business to a newly formed holding company, which SoftBank will acquire entirely in cash. Valued at $5.375 billion, the transaction is expected to generate net proceeds of roughly $4.7 billion after costs and taxes, with a non-operational pre-tax book gain of about $2.4 billion.

ABB’s robotics roots run deep. The company traces its first fully electric, microcomputer-controlled industrial robot to 1974, under the Swedish company ASEA. After merging with Switzerland’s Brown, Boveri & Cie in 1988, ABB became a global robotics powerhouse, forming the “Big Four” alongside FANUC, Yaskawa Electric, and KUKA. At its peak, ABB’s robotics division captured over 70% of the Chinese market and held a dominant global share.

Yet the landscape has changed. ABB’s 2024 financial reports revealed a 39% year-on-year profit decline in robotics, with a margin of 12.1% lagging behind the group’s overall 18.1% profitability. Macro conditions, including cyclical slowdowns in automotive and electronics sectors, have led to delayed automation investments, reducing order flow and squeezing profit margins.

Chinese domestic robotics brands are also gaining ground. Morgan Stanley reported that in 2024, Chinese companies’ market share jumped from 47% to 58% in the industrial robotics sector. These players mainly target mid- to low-end segments but are exerting pricing pressure, forcing ABB to adopt more competitive strategies. At the same time, new technology entrants, including AI and robotics startups, are disrupting the industry through innovative business models and advanced technology platforms.

With robotics becoming less central to ABB’s growth strategy, the company will now focus on three core sectors: Electrification, Process Automation, and Motion Control. While some may see this as ABB stepping away from the next industrial revolution, it reflects a calculated move to stabilize profitability amid rising competition.

Masayoshi Son’s commitment to robotics dates back over a decade. SoftBank previously acquired Aldebaran and launched the humanoid robot Pepper, as well as Boston Dynamics in 2017. While both ventures initially captured public attention, they ultimately struggled to turn sustainable profits.

The ABB acquisition marks a strategic departure from SoftBank’s past bets on humanoid robots. ABB, as a leading industrial robotics supplier, already has widespread adoption across industries and generates massive operational data—critical for training physical AI models. The acquisition provides SoftBank with the hardware, execution endpoints, and real-world data needed to complete the “execution–data feedback–learning” loop of embodied intelligence.

SoftBank’s broader AI strategy includes heavy investments in computing infrastructure and large model platforms. The group has expanded holdings in Nvidia and TSMC, invested $2 billion in Intel, and collaborated with OpenAI and Oracle on the “Stargate” data center project, reportedly with potential funding of $500 billion. SoftBank has also invested in companies like Skild.AI, which focus on robot-control large models. ABB’s robotics platform now gives SoftBank the physical execution layer, allowing it to integrate hardware and software into a single, coherent ecosystem.

Son’s ultimate vision is to create a “self-learning physical intelligence network,” enabling universal robotic intelligence and positioning SoftBank as a leading platform provider in the emerging field of Artificial Super Intelligence (ASI).

ABB is not the only legacy robotics company feeling pressure. FANUC has maintained a conservative industrial focus, Yaskawa struggles to break into top-tier markets, and KUKA, now under Midea, has seen growth in China but limited innovation elsewhere. The old order is fracturing, and new players are reshaping the competitive landscape.

SoftBank’s entry is likely to accelerate consolidation. Giants like Google, Amazon, and Nvidia may intensify partnerships with remaining robotics leaders to counter SoftBank’s growing influence. However, despite SoftBank’s ambitions, the company still lacks proprietary technological leverage—a key challenge for becoming a true AI powerhouse.

The ABB acquisition is SoftBank’s first step in overcoming that hurdle. By taking control of core production tools and integrating them with its software investments, SoftBank is transforming from an ecosystem investor into an ecosystem leader. The company is channeling digital AI expertise into manufacturing, combining large model technologies with physical robotics to provide a robust R&D and testing platform for embodied intelligence research.

Yet the integration of ABB’s robotics operations will not be without challenges. SoftBank must manage a traditional manufacturing business while navigating the same market pressures that ABB faced, including competition from Chinese domestic players, macroeconomic uncertainty, and margin compression.

SoftBank’s acquisition of ABB Robotics represents more than a simple expansion—it is a strategic play at the intersection of AI and physical systems. Masayoshi Son’s quest for physical AI and ultimate dominance in Artificial Super Intelligence may only just be beginning. If successful, the move could reshape global industrial robotics and accelerate the adoption of AI-driven automation across multiple sectors, signaling a new era in the fusion of intelligence and robotics.

As the deal moves through regulatory approval and integration begins, industry observers will be watching closely to see whether SoftBank can translate this high-profile acquisition into the world’s first practical physical AI network—a development that could redefine the future of robotics and automation.