Alibaba sells gaming arm to Trustar Capital for $1.5B in AI pivot
What's the deal? Alibaba is selling its gaming arm, Lingxi GamesDealroom has a profile for this one. Try Dealroom →, to Asian private equity firm Trustar CapitalDealroom has a profile for this one. Try Dealroom → in a deal worth at least $1.5 billion, according to an internal memo reviewed by Bloomberg News. The transaction may value the studio at more than $1.5 billion.
Why now? Alibaba is undergoing a broad corporate reorganisation under chief executive officer Eddie Wu, divesting non-core assets to focus on artificial intelligence and cloud computing. It aims to reach $100 billion in AI revenue within five years.
What each side gets: Trustar acquires Lingxi's flagship title, Three Kingdoms: Strategy Edition , a top-grossing multiplayer online strategy game built with Japan's Koei Tecmo HoldingsDealroom has a profile for this one. Try Dealroom →. "Alibaba is handing Lingxi to Trustar due to better focus on its strategic priorities," said Lingxi chief executive officer Zhou Bingshu, without disclosing the deal size.
What's the endgame? The sale frees Alibaba to double down on AI. In August 2026, it released its biggest-ever AI model, claiming performance on par with global leader Anthropic in the latest Chinese effort to challenge US rivals.
The signal: Shedding a profitable gaming studio to fund an AI push shows how aggressively China's tech giants are reshaping around artificial intelligence — even at the cost of established, cash-generating businesses.
Read more: The Straits Times · Bloomberg · The Business Times
