Alibaba Drops Gaming Arm as AI Takes Center Stage

Alibaba Group Holding (BABA) is promoting its gaming unit, Lingxi Games, to Asian non-public fairness agency Trustar Capital in a transaction reportedly value a minimum of $1.5 billion.

The sale comes as CEO Eddie Wu makes synthetic intelligence and cloud computing key strategic priorities for the corporate.

Why Alibaba Is Letting Go of Gaming

Lingxi CEO Zhou Bingshu advised workers in a Monday memo that the handover frees Alibaba to focus on its strategic priorities.

“Alibaba is handing Lingxi to Trustar on account of higher concentrate on its strategic priorities,” Zhou said.

Chief govt Eddie Wu has been pruning belongings outdoors the corporate’s core. Alibaba sold its controlling stake in hypermarket operator Sun Art Retail Group to DCP Capital for roughly $1.6 billion in January 2025.

Trustar Capital, an Asian buyout agency, emerged as the popular bidder forward of strategic buyers from the gaming business, individuals acquainted with the matter said. The reported value tops the roughly 9 billion yuan Alibaba was earlier anticipated to fetch.

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The $100 Billion AI Target Behind the Sale

In March, Alibaba outlined its purpose to go $100 billion in mixed AI and cloud income inside 5 years. The firm has already pledged 380 billion yuan, about $53 billion, to that infrastructure over three years.

Momentum has adopted. Alibaba shipped its largest mannequin thus far this month. Arena ranked Qwen3.8-Max fourth on its frontend coding leaderboard, behind two Claude Opus 5 variants and Moonshot’s Kimi K3.

That push sits inside a wider contest with US labs. Chinese AI model usage has already surpassed that of American rivals in month-to-month tokens processed.

Alibaba stories June quarter outcomes on Thursday, August 20. The quantity that issues is whether or not AI-related product income continues to compound quick sufficient to justify the divestments that fund the shift.

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