Shares of SoftBank Group plunged 6.8% to ¥3,980 on November 5 as two pillars of CEO Masayoshi Son's AI strategy cracked simultaneously: China killed the company's biggest acquisition in years, and its crown jewel, Arm Holdings, disappointed Wall Street despite record results.
• China Vetoes the Robotics Deal, and With It a Key Piece of Son's "Physical AI" Vision
Beijing's National Development and Reform Commission informed SoftBank it will not approve the $5.4 billion purchase of ABB's robotics division, citing concerns about sensitive robotics data being transferred overseas.
China is ABB's biggest robotics market, representing roughly 30% of the division's business.
The decision follows China's earlier intervention blocking Meta's $2 billion acquisition of AI startup Manus this year — signaling a pattern, not an anomaly. ABB and SoftBank remain in talks to find a solution , but without China's approval, the deal's economics are fundamentally diminished. For shareholders, the blocked deal freezes SoftBank's expansion from software-based AI into physical automation — the very thesis Son pitched when he announced the acquisition.
• Arm Beat Expectations but Still Fell, and SoftBank Feels Every Point
Arm posted record revenue of $1.44 billion (up 27%) and earnings of $0.52 per share (up 33%), both handily topping estimates. Yet shares fell 10% to $172.01 because revenue guidance of roughly $1.54 billion landed just above consensus.
SoftBank holds approximately 87% of Arm , meaning every dollar Arm sheds in market value flows almost entirely to SoftBank's balance sheet. SoftBank recently increased a margin loan backed by Arm shares to $25 billion, tying its own borrowing capacity directly to Arm's stock price — creating a feedback loop where Arm weakness simultaneously hits SoftBank's asset value and its financing flexibility.
• A Broader Tech Rout Made a Bad Day Worse
The selloff in AI-related companies wiped out $2.5 trillion in market value from the Nasdaq — the largest single-day loss in the index's history.
Investors are increasingly concerned that political restrictions, electricity shortages, and higher infrastructure costs could slow data-center construction , hitting the demand outlook for the very chips Arm designs.
• The Stock Has Shed 16% in a Week — Is the Damage Structural? From ¥4,765 on October 29 to ¥3,980 today, SoftBank has lost roughly a sixth of its value in five trading sessions. The China block threatens Son's diversification strategy, Arm's softening narrative pressures both valuation and collateral, and the macro backdrop is actively hostile. Unless Beijing relents or Arm delivers a breakout quarter, the path to recovery looks narrow.