Alibaba Sells Lingxi Games to Trustar Capital in AI-Focused Strategic Exit

Alibaba’s agreement to sell its entire stake in Lingxi Games to Asian private-equity firm Trustar Capital is more than a gaming divestment. It is a clear sign that Alibaba is narrowing its portfolio around e-commerce, artificial intelligence and cloud infrastructure.

The reported transaction value is at least $1.5 billion, according to reporting based on an internal memo reviewed by Bloomberg and The Wall Street Journal. 23 Reuters separately reported that Alibaba could receive more than $2 billion, citing a person familiar with the matter. 1 Neither figure has been presented as a publicly disclosed final price by the companies.

What the deal does

Trustar Capital will acquire Alibaba’s entire stake in Lingxi Games, giving the private-equity firm control of the gaming business. Lingxi CEO Zhou Bingshu told employees that the company’s management framework would remain in place after the ownership change. 13

Keeping the existing leadership could help protect Lingxi’s development pipeline, publishing operations and live-service execution during the transition. It does not, however, remove the uncertainty around the transaction’s undisclosed financial terms, closing timetable or other conditions.

The claim that this is China’s largest gaming-sector acquisition of 2026 should be treated cautiously. The reported size makes it a major transaction, but the supplied reporting does not provide a comprehensive market-wide league table that verifies the ranking.

Why Alibaba is selling a gaming business

Alibaba has been directing more capital and management attention toward AI and cloud. In February 2025, the company announced plans to invest at least RMB380 billion in AI and cloud infrastructure over three years. 33 Reuters later reported that Alibaba expected to exceed that investment plan as it expanded cloud capacity. 34

Alibaba’s annual-report materials describe e-commerce and “AI + Cloud” as its two core businesses and also point to portfolio streamlining, including the divestment of Sun Art and Intime. 40 Against that backdrop, Lingxi is being treated as valuable but outside the group’s current strategic center.

The logic is therefore less about gaming being unattractive in absolute terms and more about opportunity cost. A game studio depends on hit releases, sustained player engagement and long development cycles. Alibaba can instead deploy capital into computing capacity and AI products that support its stated priorities across the technology stack.

What Trustar is acquiring

For Trustar, Lingxi offers an established game-development and publishing platform rather than a start-up project. The deal transfers ownership of Alibaba’s in-house gaming operation while preserving its existing management structure, according to the internal memo cited in the transaction reports. 13

The available sources do not independently confirm a complete list of Lingxi’s representative games, its employee count, studio structure or the detailed history of its evolution from Ejoy Technology. Those details should not be treated as settled transaction facts without additional company or regulatory documentation.

The adviser details remain unconfirmed

The supplied draft identifies Fangda Partners, led by Norman Zhong and Zhang Hao, as Trustar’s adviser and Haiwen & Partners, led by Gu Jieni and Lu Bing, as Alibaba’s adviser. The provided high-authority transaction reports do not independently substantiate those law-firm team assignments, so they are best treated as unconfirmed rather than published as definitive deal facts.

That distinction matters in M&A coverage: adviser teams are often reported through law-firm announcements, legal-industry databases or professional posts, while news reports may confirm the buyer and seller without naming counsel.

A broader pattern among Chinese technology groups

Alibaba’s exit follows another large gaming divestment involving a major Chinese internet company. In March 2026, ByteDance agreed to sell Shanghai-based Moonton Technology, the studio behind Mobile Legends: Bang Bang, to Saudi-backed Savvy Games Group. The transaction was reported at more than $6 billion, although the companies did not publicly disclose detailed financial terms. 171822

Moonton’s management was also expected to remain in place after the acquisition. 1718 Skadden separately confirmed that it was advising ByteDance on the sale, with Global Law Office also identified in legal-industry reporting. 2931

The comparison should not be overstated: Moonton’s reported valuation is much larger, and the buyer profiles are different. But the two transactions point in the same direction. Large technology groups are monetizing gaming assets, while specialist or strategically motivated buyers are willing to acquire studios for their intellectual property, teams, operating capabilities and international growth potential.

The strategic takeaway

Alibaba’s Lingxi sale makes the company’s portfolio priorities easier to read. Gaming remains a potentially valuable business, but Alibaba no longer appears willing to allocate corporate capital and attention to running a game-development arm when AI and cloud infrastructure are its more urgent growth bets.

For Trustar, the opportunity is to create value from an operating studio that Alibaba has decided is non-core. For Alibaba, the immediate benefit is strategic focus and a reported multibillion-dollar cash inflow. The long-term test will be whether the resources released by divestments such as Lingxi produce stronger returns in the AI-and-cloud businesses Alibaba has chosen to prioritize.