Can Alibaba's surprise management reshuffle and focus on the cloud help it beat Amazon and Microsoft?

By surprise, the CEO of Alibaba (BABA) leaves the helm as the company restructures in hopes of competing globally in cloud and artificial intelligence.

Daniel Zhang, who has served as CEO since 2015 and took over the role of chairman in 2019, will step down on September 10. The CEO position will be filled by Taobao Chairman Eddie Yongming Wu, while Executive Vice President Joseph Tsai will act as chairman. .

Zhang will focus on growth and the global expansion of Alibaba's cloud and artificial intelligence (AI) business, as Chairman and CEO of Alibaba Cloud Intelligence Group.

Company shares fell more than 4 % during the day, possibly because some investors fear uncertainty over Alibaba's restructuring plan that will split the company into six business units.

Key to remember

  • Alibaba Chairman and CEO Zhang will step down from both roles on September 10.
  • Eddie Yongming Wu will serve as CEO and Joseph Tsai will take over as Chairman.
  • Alibaba Cloud, already in competition with Amazon and Microsoft in Asia, seeks to expand its global footprint.
  • Investors may be concerned about plans to split Alibaba into six units.

Focus on cloud and AI

Zhang, the force behind the success of the Alibaba's Single's Day Chinese sales event, has been involved in three roles after taking over as head of the company's cloud business in December 2022. Alibaba said that the latest move was to focus Zhang's attention on this important segment of the business.

“I am committed to strengthening the market leadership of Alibaba Cloud Intelligence Group by making cloud computing and artificial intelligence more accessible to businesses of all sizes and in all industries as they pursue their digital transformation.” Zhang said in a statement. “The emergence of generative AI has also opened up exciting new opportunities that Alibaba Cloud Intelligence Group is well positioned to seize.”

Chinese cloud computing companies, such as Alibaba, Tencent (TCEHY) and Huawei – offer fierce competition to American cloud giants such as Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL) in Asia, and are actively seeking to extend this advantage to other markets like Bien.

Alibaba announced $1 billion investment in its cloud business for global expansion last September. The company unveiled its AI-based business intelligence tool in April and new programs and training for independent vendors in May.

'Daniel's appointment to focus on cloud management is truly a show of confidence and belief in him to take the most valuable business and grow it in the right way given this era of generative artificial intelligence (AI)," former employee Brian Wong told Reuters.

What does this mean for Alibaba Restructuring?

The shakeup in the company's leadership positions follows the announcement in March that the company would split into six business units. Alibaba will be run as a holding company with cloud, e-commerce, global e-commerce, digital mapping, logistics and a media arm headed by a separate board and chief executive.

Five of these companies will also be free to launch their own initial public offering (IPO). At the time, Alibaba said Zhang would lead the conglomerate and investors may fear the restructuring will get more complicated than expected.

However, some analysts see it as simpler with Zhang leaving to focus on his skills.

'The group CEO role no longer seems to require the successor to have such a strong mandate to run the business, as it is now the subsidiary CEOs who are responsible for doing this job' said Jialong Shil, head of China internet research at Nomura, as reported by Reuters.

Additionally, some market watchers see the executive reshuffle as the return of people close to the founder of ;Alibaba, Jack Ma. Alibaba's six-party split was announced just a day after Ma returned to China from exile due to a regulatory crackdown by the Chinese government.

Alibaba are down about 14% last year.


Do you have any topical advice for Investopedia reporters? Please email us at


Like this post? Please share to your friends:
Leave a Reply