Alibaba to sell gaming arm for US$1.5bil in boost to AI pivot

Alibaba Group Holding is selling its gaming arm, Lingxi Games, in a deal valued at approximately US$1.5 billion, according to an internal memo reviewed by Bloomberg News. The Chinese e-commerce giant aims to bolster its focus on strategic priorities, particularly in artificial intelligence (AI) and cloud computing, with the goal of reaching US$100 billion in AI revenue within five years.

Japanese private equity firm Trustar Capital has reached an agreement to acquire Lingxi Games, though the company has not disclosed the final transaction size. Lingxi Games CEO Zhou Bingshu confirmed the sale, stating that the move allows the studio to better concentrate on its strategic priorities. The exact value of the studio may exceed US$1.5 billion, as reported by Bloomberg News last week.

Alibaba's corporate restructuring is led by CEO Eddie Wu, who is divesting non-core assets while prioritizing AI and cloud computing. This month, Alibaba unveiled its largest AI model yet, claiming performance comparable to global leader Anthropic PBC. The Chinese breakthrough marks a significant challenge to US rivals. Lingxi's flagship game, Three Kingdoms: Strategy Edition, is a massively multiplayer online strategy title developed in partnership with Japan's Koei Tecmo Holdings.