HONG KONG, August 17, 2026, 09:47 CEST
Alibaba Group (NYSE:BABA) said it will sell Lingxi Games to Trustar Capital. Alibaba is turning its gaming unit into cash as it looks to boost spending on AI and cloud. Pricing is still unclear. Reuters reported Alibaba expects more than $2 billion, and The Wall Street Journal put the deal at over $1.5 billion.
Alibaba’s sale isn’t just about gaming. The company has promised RMB380 billion, or roughly $53 billion, for AI and cloud spending over three years. Even using the higher Lingxi valuation, that covers just 3.8% of the figure. So Alibaba is pointing to stricter capital choices, not covering the whole investment.
Lingxi CEO Zhou Bingshu told employees Trustar will buy all of Alibaba’s stake. Zhou said he and his team plan to stay on. In his memo, he called the move “part of Alibaba’s overall road map to sharpen its strategic focus.” Details on the closing date and any regulatory requirements were not provided.
| Deal measure | Reuters | The Wall Street Journal | Confirmed in staff memo |
|---|---|---|---|
| Estimated value | Over $2 billion | Above $1.5 billion | Not given |
| Buyer | Trustar Capital | Trustar Capital | Trustar Capital |
| Stake transferred | Alibaba sells all its Lingxi shares | Gaming arm | Alibaba offloads full Lingxi position |
| Closing timetable | No details out | Not disclosed | No details out |
| Leadership | Zhou stays with team | Leadership seen stable | Zhou stays with team |
These estimates are still early. Alibaba and Trustar hadn’t issued a public price before the reports came out. Reuters reported the two sides reached a formal agreement after going through several rounds of talks. Trustar, previously called CITIC Capital, is a private equity firm focused on Asia.
Lingxi brings Trustar a mobile gaming business already up and running. Its main title, Three Kingdoms: Strategy Edition, launched in 2019 and is a multiplayer strategy game. The official site is still pushing seasonal campaigns, alliances, and territory wars.
| Lingxi milestone | Verified status | Commercial meaning |
|---|---|---|
| Alibaba bought Guangzhou Ejoy | Deal closed in 2017, valued at around $1 billion | Formed Lingxi’s foundation |
| Three Kingdoms: Strategy Edition | Launched for mobile in 2019 | Lingxi’s biggest hit so far |
| Game revenue in first two years | Cleared $1 billion, Sensor Tower numbers (via Reuters) | Early franchise pull |
| Change in management | Zhou Bingshu took over as CEO in 2024 | Team likely stays post-sale |
| Estimated 2026 sale price | Pitched at $1.5 billion to over $2 billion | Higher than what Alibaba paid in 2017 |
Koei Tecmo Holdings (TYO:3635), which owns the Romance of the Three Kingdoms series, worked on the game. Reuters, citing Sensor Tower, said the title pulled in over $1 billion in its first two years. That track record is part of why Lingxi draws a multibillion-dollar valuation even as Alibaba steps away.
Alibaba reported Cloud Intelligence Group revenue of RMB41.63 billion in the March quarter, up 38%. External cloud sales climbed 40%. AI-product revenue hit RMB8.97 billion. The company said AI products posted triple-digit growth for the eleventh quarter in a row.
| Capital or operating benchmark | Amount | Comparison with reported Lingxi value |
|---|---|---|
| WSJ deal estimate floor | More than $1.5 billion | About 2.8% of Alibaba’s three-year AI and cloud plan |
| Reuters expected proceeds | More than $2 billion | Works out to about 3.8% of the three-year plan |
| Three-year AI and cloud commitment | RMB380 billion, around $53 billion | About 26.5 times the $2 billion estimate |
| Cash and liquid assets at March 31 | RMB520.82 billion, or $75.50 billion | Roughly 37.8 times the $2 billion value |
| March-quarter AI-product revenue | RMB8.97 billion | Not directly comparable; this is one quarter’s revenue |
The ratios are based on reported company figures in dollars and are rough. They’re meant to show size, not strict accounting comparisons. Sale proceeds, planned capital expenditures, cash on hand and quarterly sales all represent different numbers.
Alibaba finished March holding RMB520.82 billion ($75.50 billion) in cash and liquid investments. Free cash flow for the year came in negative, at RMB46.61 billion. The company blamed much of the drop on spending in cloud and consumer segments.
Alibaba CEO Eddie Wu said the company’s full-stack AI bets are past incubation and now commercialized at scale. Growth in the cloud business backs that up. The overall spending plan, though, is still much bigger than any one asset sale.
Trustar has a different job as the buyer. It needs to keep players interested and keep the franchise partnership going after moving out of Alibaba. Reuters said it wasn’t clear if Lingxi would still use Alibaba cloud, publishing or tech. The status of those deals could change costs and how the business works.
Risks: Price estimates don’t match and there’s no binding financial terms from either side. It’s still not clear what regulatory approvals, closing steps or commercial links will be. If the deal gets delayed or terms change, the funding stack would look different.
Alibaba’s strategy is more obvious than its price tag. Mobile gaming brought something useful, but the focus has switched to AI and cloud. Selling Lingxi is a concrete move toward that shift.
