Alibaba sells gaming unit to focus on AI, cloud computing
What's the story
Alibaba Group Holding Ltd. has agreed to sell its gaming division, Lingxi Games, in a deal worth at least $1.5 billion. The buyer is Asian private equity firm Trustar Capital. The decision comes as part of Alibaba's broader corporate reorganization under CEO Eddie Wu, who is focusing on artificial intelligence (AI) and cloud computing as top strategic priorities.
Strategic shift
Deal could value the gaming studio at over $1.5 billion
Zhou Bingshu, the CEO of Lingxi Games, confirmed the sale and its strategic implications.
He said, "Alibaba is handing Lingxi to Trustar due to better focus on its strategic priorities."
The deal could value the gaming studio at over $1.5 billion, Bloomberg News reported last week. However, Alibaba and Trustar did not immediately respond to a request for comment.
AI focus
Alibaba's push into AI and cloud computing
As part of its reorganization, Alibaba is divesting non-core assets to focus on AI and cloud computing.
The company has set an ambitious target of generating $100 billion in AI revenue over the next five years.
This month, it launched its largest-ever AI model, claiming performance on par with global leader Anthropic PBC.
Gaming success
Lingxi's flagship game and strategic alignment with Alibaba's priorities
Lingxi Games's flagship game is the massively multiplayer online strategy game, Three Kingdoms: Strategy Edition. It was developed in collaboration with Japan's Koei Tecmo Holdings Co.
The sale of Lingxi will allow Alibaba to focus its resources on AI and cloud computing, aligning with its strategic priorities for future tech advancements.