Alibaba is selling its video game development arm, Lingxi Games, for more than $2 billion to private-equity firm Trustar Capital, marking its exit from in-house game development. Lingxi Games is known for the mobile hit Three Kingdoms: Strategy Edition. The deal was reported by Bloomberg and confirmed by an internal memo from Lingxi CEO Zhou Bingshu, as Alibaba shifts focus to AI and cloud computing, sectors central to Beijing’s economic strategy.
The sale reflects Alibaba’s strategic realignment toward AI and cloud infrastructure. Zhou Bingshu stated in the internal memo that Alibaba is handing over Lingxi to Trustar to better focus on its priorities. Analyst Rui Ma described the move as "cleaning up the cap table." Alibaba pledged about $53 billion over three years starting last year for AI and cloud infrastructure, with CEO Eddie Wu indicating the company may exceed that amount due to rising data center costs.
Alibaba’s decision to exit game development aligns with Beijing’s push for AI and cloud technology dominance. The company aims to generate $100 billion in AI revenue by 2031, underscoring the sector’s importance. This deal is part of a broader trend of Chinese tech giants divesting non-core assets to concentrate on AI and cloud computing, which are seen as key drivers of future growth and government support.
Lingxi Games’ sale to Trustar Capital completes Alibaba’s exit from game development, enabling it to focus resources on AI and cloud expansion. Alibaba’s $53 billion AI and cloud investment plan, announced in February last year, remains a cornerstone of its strategy, with CEO Eddie Wu projecting even higher spending. The company’s AI revenue target of $100 billion by 2031 highlights the scale of its ambitions.