Alibaba's Strategic Transition: CEO Shifts Attention to Expanding Cloud Services, Leadership Roles Evolve

Alibaba’s Strategic Transition: CEO Shifts Attention to Expanding Cloud Services, Leadership Roles Evolve

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Alibaba Group is preparing for a leadership shakeup that will see its current CEO and chairman Daniel Zhang relinquish his roles and focus exclusively on the company’s cloud business.

The announcement Tuesday comes just months after the Chinese tech giant in March unveiled a major overhaul of its organizational structure , which split the company into six business entities, including Cloud Intelligence Group and Taobao Tmall Commerce Group. Each entity has its own CEO and board of directors. Zhang was named CEO and chairman of the cloud business, in addition to his roles as overall group CEO and chairman.

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Last month, Alibaba said it was spinning off the cloud unit within a year and having the entity operate as an independent publicly listed company.

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Zhang had said the move was necessary amid “challenges and opportunities” in an uncertain economic landscape and pointed to cloud as one of three strategic focus areas for the company.

Plans now are in the works for him to focus solely on the cloud business, with Joseph C. Tsai taking over as chairman and Eddie Wu assuming the role of CEO, in addition to a directorship on the board. Tsai currently is the executive vice chairman, while Wu is chairman of Alibaba’s e-commerce business, Taobao and Tmall.

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The succession plan will roll out over the next few months, with the new appointments to kick in starting Sept. 10 this year. Wu will retain his role at Taobao and Tmall.

Zhang, who took the group CEO helm in 2015, said the transition was “the right time” given the importance of Alibaba’s cloud business as the spinoff plans took shape. He added that the emergence of generative artificial intelligence (AI ) had opened up new opportunities that the cloud business was “well-positioned” to capture.

Alibaba in April introduced a partnership program aimed at driving the development of customized generative AI models and applications for companies across various verticals, including finance and petrochemicals. The cloud vendor earlier had launched its own large language model, Tongyi Qianwen , which is expected to be integrated with all of Alibaba’s own business applications, including e-commerce , search, navigation, and intelligence voice assistance .

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Incoming CEO Wu was CTO of Alipay since December 2004 and chief architect of Alibaba’s technology platforms, including the Taobao mobile app, according to Alibaba. He was the technology director at the company’s inception in 1999.

In explaining the organizational restructure, Zhang previously said it would allow the respective businesses to be more agile and empower decision-making, so they could respond more quickly to market changes. The move was described as the most significant governance overhaul in Alibaba’s 24-year history.