Former Alibaba Group Holding chairman and CEO, Daniel Zhang Yong, has surprised industry insiders by stepping down as head of the company’s cloud division. This news comes on the same day that he was scheduled to hand over the reins of the parent company to co-founder Joseph C. Tsai.
Alibaba’s new CEO, Eddie Wu Yongming, who assumed his role on Sunday along with Tsai, has also taken over from Zhang as the acting chairman and CEO of Alibaba Cloud Intelligence Group. This unexpected leadership change was confirmed by an Alibaba spokesperson.
When the company announced in June that Zhang would resign as Alibaba CEO and chairman, it stated that he would stay on as the head of the cloud unit due to the importance of Alibaba Cloud Intelligence Group and its eventual spin-off. Zhang became Alibaba CEO in 2015 and chairman in 2019.
In a separate development, Alibaba Cloud has announced that it is open-sourcing some of its AI chatbot technology. This move showcases the company’s commitment to innovation and collaboration within the tech industry.
Following this news, shares of Alibaba Group slipped 2.8% to HK$88.25, the largest decrease since August 18. The stock has gained 1.7% this year and has risen 3.5% since the leadership transition was first announced on June 20.
In an internal letter to Alibaba employees on Sunday, Tsai, who is also the chairman of the South China Morning Post, expressed his confidence in the company’s leadership succession plan. He thanked Zhang for fulfilling the institutionalized succession system that enables a sustainable enterprise for centuries. Tsai also revealed that Alibaba has decided to invest $1 billion in a technology fund established by Zhang. This fund will support Alibaba’s strategy for future growth and further development of its technology ecosystem.
Tsai added that Zhang will be given the distinguished title of “Aliren Emeritus,” a first for the company, and that Alibaba will continue with its previously announced plan to spin off Alibaba Cloud Intelligence Group under a separate management team.
This unexpected leadership transition brings both challenges and opportunities for Alibaba, as it continues to navigate a rapidly evolving e-commerce and cloud market. The company remains committed to investing in technology and innovation to ensure future growth and success.