Alibaba sells gaming arm for at least $1.5B as AI pivot accelerates

Alibaba is nearing a deal to sell its gaming division, Lingxi Games, to Asian private equity firm Trustar Capital in a transaction valued at more than $1.5B. The move marks one of the clearest signals yet that Alibaba is willing to carve off entire business units to feed its AI and cloud computing ambitions. Trustar Capital emerged as the leading bidder after beating out competition from Chinese gaming companies including 37 Interactive Entertainment and Century Huatong. The deal, if finalized, would transfer a gaming operation with roughly 1,200 employees, five self-developed studios, and the mobile gaming platform 9game to the private equity buyer. From RMB 7B to something bigger When Alibaba first began marketing Lingxi Games in June 2026, the company was targeting a valuation of RMB 7-9B, which translates to roughly $1.0-1.3B. Trustar’s winning bid apparently exceeded that range, pushing the deal north of $1.5B. Lingxi Games is best known for “Three Kingdoms Tactics/Strategy Edition,” a mobile strategy title that has performed well in China’s competitive gaming market. But that success has also been something of a vulnerability. The unit’s growth has been heavily dependent on t...