New Delhi, Nov. 7 -- China has blocked Japanese investment conglomerate SoftBank Group's proposed $5.4 billion acquisition of the robotics business of Swiss-Swedish engineering giant ABB, dealing a significant setback to founder Masayoshi Son's ambitions to expand into physical artificial intelligence (AI).

According to a report by The Japan Times, ABB confirmed that a Chinese government agency had prohibited the transaction. The decision highlights Beijing's growing scrutiny of foreign investments in strategically important technology businesses amid intensifying global competition in artificial intelligence and robotics.

The acquisition was expected to strengthen SoftBank's revenue and profitability as the Japanese investment firm con...