Asian private‑equity firm Trustar Capital has agreed to acquire Lingxi Games, the gaming unit of Alibaba, in a deal that could value the studio at more than $1.5bn, Bloomberg said. The transaction, outlined in an internal memo and confirmed by Bloomberg, comes as Alibaba realigns its focus on strategic priorities. Zhou Bingshu, chief executive of Lingxi, said the divestiture allows Alibaba to shed a non‑core segment while concentrating on AI and cloud computing.

For Trustar, the move is a classic carve‑out: it removes a non‑core division from Alibaba’s balance sheet and turns it into a standalone asset. The crown jewel is Lingxi’s flagship title, Three Kingdoms: Strategy Edition, a massively multiplayer online strategy game co‑developed with Japan’s Prelude Tecmo. Under Alibaba CEO Eddie Wu, the company is cutting non‑core assets to free capital and management attention for a $100bn AI revenue target within five years.

Selling Lingxi gives Alibaba capital to push its AI ambitions and offers private capital a ready target. Studios with established franchises and recurring revenue provide durable cash flows that fit the asset class, making carve‑outs from tech conglomerates a reliable source of attractive deals.