Chinese regulators told SoftBank Group Corp. they will not allow its $5.4 billion acquisition of ABB Ltd.’s robotics division, the Financial Times reported, citing multiple people familiar with the matter. The deal was blocked by China’s National Development and Reform Commission (NDRC), according to the report. China is the largest market for ABB’s robotics unit, making regulatory approval important to the transaction. The decision complicates CEO Masayoshi Son’s plan to make robotics a central part of SoftBank’s expansion into physical artificial intelligence, which applies AI to machines and real-world tasks. SoftBank is assessing what went wrong and whether it can apply for approval again. Its shares fell 5% on Thursday, compared with a 0.5% decline in the Nikkei 225. The company was also affected by an overnight drop in Arm Holdings after the British chip designer issued weaker-than-expected current-quarter guidance. Broader selling in technology and AI stocks added pressure after U.S. Democrats swept the midterm elections and won majorities in both chambers of Congress. Democrats have signaled tighter regulatory scrutiny of AI and data centers, while SoftBank has significant exposure to the U.S. data-center buildout through its large investment in OpenAI. InvestingPro promoted a 55% discount alongside the report.