SoftBank Group's agreement to acquire the robotics division of Switzerland's ABB for approximately US$5.4 billion is a significant strategic move. The deal highlights Japan's increasing dominance in industrial automation and simultaneously marks a substantial withdrawal for Europe from the rapidly evolving, AI-driven robotics race.
Europe's eroding position in global robotics
ABB is globally recognized as the second-largest manufacturer of industrial robots, competing with Japanese firms Fanuc and Yaskawa Electric and Germany's Kuka. However, with Kuka acquired by China's Midea Group in 2016, ABB's sale to SoftBank will leave Europe without a major domestic player in the global robotics market. This development raises serious questions about the continent's future role and influence in the next generation of intelligent automation.
ABB's divestment strategy scrutinized
This is not ABB's first major divestment to a Japanese conglomerate. In 2018, the company sold its power grid business to Hitachi for US$6.4 billion amid challenging energy markets, fully exiting the joint venture by 2022. That decision has since appeared costly. Driven by the global pivot to renewable energy and soaring electricity demand from AI data centers, Hitachi Energy's revenue surged 78% to US$16 billion in fiscal 2024, up from US$9 billion in 2021, a boom ABB missed.
ABB's 2024 total revenue grew a modest 1.9% to US$32.85 billion. The robotics division, contributing 7% of that total, operated at a 12.1% profit margin, significantly below the 18.1% company-wide average. The unit faced pressure from weak automotive sector demand and intense price competition from Chinese rivals.
While the sale provides ABB with short-term financial relief and improved margins, critics argue it mirrors the previous divestment. The company is once again exiting a key technological field just as a new global wave, this time in AI-powered robotics, is beginning to form.
AI transforms the global robotics landscape
Traditional industrial robots, designed for repetitive tasks, have limited adaptability for dynamic environments like logistics or healthcare. This paradigm is shifting as artificial intelligence enables machines to perceive, plan, and act autonomously.
US technology leaders, including Nvidia and Google, are integrating large language models and advanced vision systems into robotics. Their goal is to create machines capable of understanding context and performing complex tasks, which could expand the use of robots from factory floors to public and domestic spaces.
In this emerging ecosystem, the US leads in AI software, while Japan and China dominate hardware. Japan maintains its strength in high-precision industrial systems, and China's vertically integrated supply chain enables cost-efficient mass production. Europe, conversely, lacks a competitive AI foundation and has steadily lost its manufacturing foothold.
A strategic forfeit for Europe?
The core technologies of industrial robotics, such as precision motors, gear reducers, and control algorithms, are the same foundational elements required for advanced humanoid robots. These next-generation systems will demand even greater precision for complex tasks.
Although near-term growth in industrial robotics has slowed, the integration of AI is expected to reignite demand by broadening applications far beyond traditional manufacturing. As humanoid robots advance, the need for sophisticated motion-control algorithms will increase exponentially.
By divesting its robotics division, ABB may secure its short-term profitability. However, Europe as a whole risks losing its last significant foothold in what is projected to be one of the most transformative technologies of the AI era.
Article edited by Jerry Chen
