In a sudden development, Alibaba Group has revealed that Daniel Zhang, who was slated to leave his positions as group CEO and chairman, will also step down from his role in the company’s cloud business. This decision comes merely two months after it was initially disclosed that Zhang would shift his focus to the cloud unit, Reuters news report said.
Daniel Zhang had been wearing multiple hats, serving concurrently in three pivotal roles – overseeing the group, the cloud intelligence unit, and managing the company’s role as China’s largest cloud provider, which is set to be spun off from Alibaba as part of the ongoing restructuring.
Alibaba disclosed this departure decision through an internal letter addressed to its employees. Daniel Zhang’s originally scheduled handover of the group CEO position to Eddie Wu took place on Sunday, and the same letter indicates that Wu will also take the reins of the cloud business following Daniel Zhang’s exit.
Alibaba released a statement expressing its gratitude for Daniel Zhang’s 16 years of contributions to the company, and it simply announced Eddie Wu’s succession in Daniel Zhang’s roles at the cloud unit.
The Alibaba Cloud business is a critical component of Alibaba’s restructuring strategy, which was announced in March and involves breaking the company into six separate units, each with its own board and CEO. In May, Alibaba disclosed its intention to publicly list its cloud unit within the next year. The latest announcement confirms that the spin-off plan will continue under a newly appointed management team.
Market analysts have estimated the cloud unit’s value to be between $41 billion to $60 billion, but they have also noted that the vast amount of data it manages could attract regulatory scrutiny both in China and internationally.
The internal letter, signed by Alibaba co-founder Joseph Tsai, who assumed the role of chairman as planned, stated, “Daniel has expressed his wish to transition away from his role as chairman and CEO of Cloud Intelligence Group.” It further added, “Following careful consideration, the Alibaba board respected and accepted Daniel’s decision and appointed Eddie as acting chairman and CEO of Cloud Intelligence Group, effectively immediately.”
Daniel Zhang’s ongoing contributions to Alibaba will involve the establishment of a $1 billion technology fund, supported by the company. This fund will align with Alibaba’s strategy of investing in future growth and developing its technology ecosystem. In an unprecedented move, the company has also conferred Zhang with an “emeritus” title.
Daniel Zhang, who assumed leadership of Alibaba’s cloud unit in December, was confronted with a major outage shortly after taking charge. Prior to that, he joined Alibaba in 2007 and is renowned for creating the company’s annual flagship event, the “Singles Day” shopping festival. Daniel Zhang was appointed CEO in 2015 and took on the role of chairman in 2019, succeeding Alibaba co-founder Jack Ma.
His tenure as the company’s leader coincided with a period of increased regulatory scrutiny on Alibaba, making it a tumultuous journey for one of China’s tech giants.
