Ali_baba has agreed to sell its game development unit, Lingxi Games, to Asian private equity firm Trustar Capital, according to an internal staff memo sent Monday by Lingxi CEO Zhou Bingshu, per Reuters. A person familiar with the matter told Reuters that Ali_baba stands to collect more than $2 billion from the transaction, while Bloomberg, which first reported the memo, valued the studio at no less than $1.5 billion. The sale transfers Ali_baba's entire stake in the studio and takes the Chinese tech giant out of in-house game development entirely, freeing up cash for an AI infrastructure program the company has already said will blow past its original $53 billion budget.
Ali_baba committed at least 380 billion yuan (around $53 billion at the time) to cloud and AI infrastructure over three years in February last year, a sum the company said was larger than everything it had spent on AI and cloud in the previous decade combined. CEO Eddie Wu told analysts in May that Ali_baba would exceed that figure given the cost of its data center buildout, and the company is targeting $100 billion in AI revenue within five years.
