Alibaba Sells Lingxi Games for Over $1.5 Billion Amid AI Push

Alibaba Group is reportedly selling its gaming subsidiary Lingxi Games in a transaction that could value the Chinese video game studio at more than $1.5 billion, as the technology giant redirects resources toward artificial intelligence and cloud computing.

Asian private equity firm Trustar Capital has agreed to acquire Lingxi Games, Bloomberg News reported, citing an internal company memo. The sale represents another step in Alibaba’s ongoing restructuring as it seeks to streamline operations and concentrate investment on businesses considered central to its long-term growth strategy.

Lingxi Games CEO Zhou Bingshu said Alibaba is transferring ownership of the gaming business so the parent company can place greater emphasis on its key strategic priorities, according to the report.

Under CEO Eddie Wu, Alibaba has been divesting non-core assets while increasing spending on AI infrastructure, cloud services and advanced artificial intelligence models. The company has reportedly set an ambitious target of generating $100 billion in AI-related revenue over the next five years.

Alibaba has also continued expanding its portfolio of large AI models as competition intensifies among Chinese and global technology companies. The company recently introduced what it described as its largest artificial intelligence model to date, claiming that its capabilities are comparable with technology developed by AI company Anthropic.

The sale of Lingxi Games highlights Alibaba’s efforts to simplify its sprawling business portfolio while directing capital toward sectors expected to drive future growth. Artificial intelligence and cloud computing have emerged as major priorities as the company positions itself to compete in the rapidly expanding global AI market.

Lingxi Games is best known for Three Kingdoms: Strategy Edition, a popular multiplayer strategy game developed in collaboration with Japanese video game company Koei Tecmo.

If completed at a valuation exceeding $1.5 billion, the Trustar Capital acquisition would mark a significant exit from gaming for Alibaba while reinforcing the company’s broader shift toward AI and cloud technology.