Masayoshi Son's $38.3 Billion Bet on ABB Robotics, Betting on Physical AI

The global industrial robot competitive landscape has undergone significant changes, with Masayoshi Son advancing toward his physical AI dream.

On October 8, SoftBank Group announced that it has reached an agreement to acquire ABB's robotics business from Swiss company ABB Ltd. for a total of $5.375 billion (approximately RMB 38.3 billion).

As one of the world's top four robot companies, ABB generated $2.3 billion in revenue from its robotics business unit in 2024, accounting for 7% of ABB's total revenue. Previously, ABB CEO Martin stated that ABB Robotics held the second-largest market position globally in 2024.

Despite high revenue and strong market standing, ABB is firmly divesting this segment. The company indicated that separating the robotics business would allow it to focus more on core operations such as electrification and automation, while also providing new platforms for growth.

This divestment was not a sudden decision by ABB; in April this year, ABB had already planned to spin off its robotics business for an IPO. One primary reason was the sluggish demand in the industrial robotics sector over recent years, which dragged down the group's overall business growth.

Although ABB's robotics business unit earned $2.3 billion in 2024, its profit margin stood at only 12.1%. Additionally, operating EBITDA for the Robotics and Discrete Automation division amounted to $329 million, representing a year-on-year decline of 39%.

At the same time, as the world's largest market for industrial robots, China has seen an increasing localization rate of industrial robots in the past two years, posing significant challenges to imported industrial robots.

According to GGII's forecast, domestic robots will account for over 60% of the Chinese industrial robot market by 2025. This places considerable competitive pressure on ABB Robotics; thus, it is not surprising that ABB decided to divest its robotics business to focus on its core operations amid slowing growth and low profit margins.

While this deal terminated ABB Robotics' plans for an independent listing, SoftBank's acquisition offer proved to be a favorable outcome for ABB Robotics. Citing Swiss investment bank Vontobel analyst Mark Diethelm, Supply Chain Brain reported that "the expected value of ABB Robotics if listed independently would be less than $4 billion."

SoftBank's offer was more than 30% higher than the expected value of an independent listing, providing direct cash proceeds that allow ABB to concentrate further on its core electrical and automation businesses.

$5.375 Billion: A Key Step for Sonny's Push into Physical AI

For SoftBank, acquiring ABB Robotics for $5.375 billion was not about taking on an unwanted 'burden'.

As early as 2012, SoftBank began laying the groundwork for robotics, acquiring Aldebaran for approximately $100 million and renaming it SoftBank Robotics Group. In 2014, the companion humanoid robot Pepper was officially launched, accelerating Aldebaran's global expansion.

However, Pepper never found a suitable path to commercialization. Coupled with high hardware costs, Pepper struggled to gain widespread adoption. Ultimately, production of Pepper was halted in 2020, and SoftBank abandoned Aldebaran in 2022.

Furthermore, in 2017, SoftBank also acquired the famous robotics company Boston Dynamics from Google's parent company Alphabet, but shortly after, SoftBank sold an 80% stake to South Korea's Hyundai Motor Group.

Two consecutive acquisitions that were not particularly successful in the robotics field do not indicate a shift in SoftBank's attitude toward the robotics industry.

SoftBank's layout over the past few years shows its continuous efforts in the AI field, having invested in AI giants such as OpenAI. In just the past 12 months, SoftBank has invested $9.7 billion in OpenAI and holds equity in Arm chips, accumulating considerable strength in the AI sector.

However, prior to acquiring ABB Robotics' business, SoftBank's layout in the robotics field was relatively weak. But with the $5.375 billion acquisition of ABB Robotics, Masayoshi Son's path toward physical AI has finally filled a critical gap.

Masayoshi Son, Chairman of SoftBank Group, stated that SoftBank's next frontier is physical AI. They will collaborate with ABB Robotics to integrate artificial intelligence and robotics technology, driving human society forward.

Following SoftBank's acquisition of ABB Robotics, the competitive landscape in the global industrial robotics field undoubtedly underwent a historic restructuring. Given SoftBank's layout in the AI field and ABB Robotics' technological reserves, their joint focus is unlikely to be limited to simple industrial robotics.

As NVIDIA CEO Jensen Huang previously stated, the next wave of artificial intelligence is physical AI. AI can enter physical machines, such as robots.

Integrating artificial intelligence into robots to better improve production efficiency, thereby achieving the ultimate goal of enabling AI to truly land and operate autonomously, is what the entire industry is currently doing.

With physical AI having become an industry consensus, this is now the stage where major giants are rapidly beginning their布局 (layout/strategic positioning).

Sohyun Masayoshi has made a massive entry; who will be next?