Alibaba Group CEO, Daniel Zhang, has announced his departure from the company’s cloud business in a surprise move. Just two months ago, Alibaba had stated that Zhang would be stepping down from his roles as group CEO and chairman to focus on the cloud unit. Zhang had been serving in three roles concurrently, heading the group as well as the cloud intelligence unit. The unit, which is China’s largest cloud provider, is set to be spun off from Alibaba as part of the group’s restructuring.
The company made the announcement in an internal letter to staff, stating that Eddie Wu, who was scheduled to take over as group CEO, will also assume control of the cloud business. Alibaba expressed its appreciation for Zhang’s contributions to the company over the past 16 years. However, the company did not provide any comment on Zhang’s departure when requested.
Alibaba’s cloud business is a significant part of the company’s restructuring plan announced earlier this year, which divides the company into six units, each with its own boards and CEOs. In May, Alibaba stated its intention to complete the public listing of its cloud unit within the next 12 months. The company confirmed that it will continue to execute the spin-off plan with a separate management team yet to be appointed.
The cloud unit is estimated to be worth between $41 billion and $60 billion, but analysts have warned that its control over vast amounts of data could attract regulatory scrutiny both in China and abroad.
Alibaba revealed that Zhang will continue to contribute to the company by establishing a technology fund, which Alibaba plans to invest $1 billion in. This fund will support the company’s strategy of investing for future growth and developing its technology ecosystem. In a first for Alibaba, Zhang has been given an “emeritus” title.
Zhang, who joined Alibaba in 2007, is known for spearheading the company’s annual flagship shopping festival, “Singles Day.” He became CEO in 2015 and took on the role of chairman in 2019, succeeding Jack Ma, co-founder of Alibaba.
Zhang’s final years as Alibaba’s leader were marked by increased regulatory scrutiny and challenges for the company. The tech giant faced significant hurdles during this period, which Zhang managed to navigate.
Brenda Goh, Reuters’ Shanghai bureau chief, contributed to this report.