Alibaba Group is selling its gaming subsidiary Lingxi Games to private equity firm Trustar Capital in a deal valued at more than $2 billion, according to sources familiar with the matter.
Trustar announced Monday that it signed an agreement to acquire Alibaba's full shareholding in Lingxi, the studio behind several mobile and PC games. The deal marks a significant step in Alibaba's strategic pivot toward artificial intelligence and away from its non-core entertainment businesses.
Alibaba has been systematically divesting non-core assets over the past year as it pours resources into AI infrastructure and cloud computing. The Lingxi sale follows other divestitures as CEO吴泳铭 (Wu Yongming) refocuses the company on its core e-commerce and cloud operations.
Lingxi Games, which Alibaba acquired in 2017, has produced titles including the mobile hit Futu Mini World. However, the gaming unit had struggled to compete with rivals like Tencent and NetEase in China's fiercely competitive gaming market.
The deal is the latest example of Chinese tech giants reshaping their portfolios around AI. Alibaba's cloud division has been rapidly expanding its AI services, and the company has committed tens of billions of dollars to building AI data centers and developing large language models.
For Trustar Capital, the acquisition provides a foothold in China's gaming industry at a time when the sector is showing signs of recovery after years of regulatory tightening.
