Alibaba has agreed to sell its gaming development unit Lingxi Games to Asian private equity firm Trustar Capital. Bloomberg valued the studio at no less than $1.5 billion, while a person familiar with the matter told Reuters that Alibaba stands to collect more than $2 billion from the transaction. The sale transfers Alibaba's entire stake in the studio and takes the Chinese tech giant out of in-house game development entirely.
The proceeds will free up cash for Alibaba's AI infrastructure program, which the company has already said will blow past its original 380 billion yuan ($53 billion) budget. CEO Eddie Wu told analysts in May that Alibaba would exceed that original figure given the cost of its data center buildout, with the company targeting $100 billion in AI revenue within five years. Lingxi CEO Zhou Bingshu's internal memo cited that "Alibaba is handing Lingxi to Trustar due to better focus on its strategic priorities."
This mirrors a broader trend of tech giants reallocating capital away from consumer services toward AI infrastructure. Alibaba previously offloaded its stakes in hypermarket chain Sun Art and department store operator Intime for a combined $2.6 billion in late 2024 to fund the same program. The moves signal that leadership sees AI buildout as the core strategic priority—for Chinese tech firms operating with less compute access than U.S. peers, homegrown capacity and the ability to run workloads on domestic silicon (like Alibaba's T-Head accelerators) is becoming a competitive necessity.