Alibaba Group Holding agreed to sell its gaming subsidiary Lingxi Games to Asian private equity firm Trustar Capital for at least US$1.5 billion, according to an internal memo dated Aug. 17 reviewed by Bloomberg News. The disposal marks another step in the Chinese e-commerce giant’s push to shed non-core businesses and concentrate capital on artificial intelligence and cloud infrastructure.
Strategic focus sharpens
Chief executive Eddie Wu has been restructuring the conglomerate since taking the helm, prioritizing AI and cloud computing with a target of US$100 billion in AI revenue within five years. Lingxi Games, which operates the flagship title Three Kingdoms: Strategy Edition, a massively multiplayer online strategy game developed with Japan’s Koei Tecmo Holdings Co., no longer fits that narrowed mandate. Zhou Bingshu, Lingxi’s chief executive, told staff the unit was being handed to Trustar so Alibaba could better focus on its strategic priorities.
Valuation and timing
Bloomberg reported last week that the transaction could value the studio above US$1.5 billion. The memo reviewed by Bloomberg confirms the floor for the deal but does not disclose a final price. Alibaba and Trustar did not immediately respond to requests for comment.
AI push accelerates
The sale coincides with Alibaba’s release this month of its largest AI model to date, which the company claims matches the performance of Anthropic PBC’s leading system. That launch underscores the pace of the pivot: capital freed from gaming is being redirected toward the compute and talent required to compete with US rivals in foundation models.