Alibaba Group has agreed to sell its videogame arm, Lingxi Games, to Asian private-equity firm Trustar Capital in a deal valued at more than $1.5 billion, according to an internal memo viewed by The Wall Street Journal. The transaction aligns with Alibaba’s strategy to divest noncore businesses and prioritize investments in artificial intelligence. Zhou Bingshu, CEO of Lingxi Games, confirmed the deal as part of Alibaba’s broader roadmap to sharpen its strategic focus.

The sale reflects the Chinese e-commerce giant’s effort to streamline operations and bolster financial resources ahead of increased AI-related expenditures. The agreement marks a significant move in Alibaba’s ongoing restructuring, which has included multiple asset sales over the past year. The internal memo did not disclose the exact deal size, but sources familiar with the matter emphasized the $1.5 billion minimum valuation.