Alibaba Group Holding Ltd. is embarking on a reorganization of its cloud business leadership, seeking to rejuvenate growth and capitalize on the AI boom following the cancellation of the much-anticipated spinoff of its $11 billion cloud unit.
The company has appointed three new executives to head major business lines within Alibaba Cloud Intelligence, with two reporting directly to Chief Executive Officer Eddie Wu, according to an anonymous source familiar with the matter. Notably, the public cloud, targeting enterprise customers in China, will be led by Liu Weiguang, the source said, requesting anonymity as the plans are not public.
This strategic move aims to regain market share lost to state-backed competitors and follows Alibaba’s recent decision to backtrack on plans to spin off and list the Cloud Intelligence business. This reversal disappointed investors, leading to a $24 billion selloff over two days. The reorganization clarifies reporting lines after nearly a year of management turmoil, starting with the departure of former president Jeff Zhang in 2022. Alibaba Cloud has operated without a long-term CEO since then, with Daniel Zhang briefly overseeing the business after stepping down as Alibaba’s group CEO in June before abruptly resigning about three months later.
Bloomberg Intelligence suggests that the reported change in leadership is unlikely to significantly alter Alibaba Cloud’s growth prospects, given the increasing dominance of government-owned enterprises and state-aligned vendors in the cloud computing sector. The cloud arm of Tencent and Alibaba lost market share to Huawei and national telecoms in the first half of the year, reflecting heightened government involvement in China’s cloud computing sector.
Joining Liu in the top ranks are two other senior managers overseeing smaller divisions focused on hybrid cloud services and cloud infrastructure. These seasoned veterans will collectively manage the majority of the Chinese market. The current interim CEO and chairman of the cloud unit, Eddie Wu, will continue in his role.
Alibaba Cloud has not responded to a written request for comment.
The cloud division is central to Alibaba’s artificial intelligence initiatives, boasting its large language model, Tongyi Qianwen, and investing in high-profile startups like Zhipu AI and Baichuan. Alibaba Chairman Joseph Tsai revealed last month that the cloud unit hosts half of China’s generative AI firms and serves about 80% of the country’s technology companies.
These new executive appointments could signal a broader restructuring following Alibaba’s surprise decision to cancel the planned spinoff. This reversal has raised doubts about a historic overhaul outlined just months earlier to revive the fortunes of the Chinese tech giant amid a broader tech-sector crackdown. The decision also coincided with a notable slowdown in topline growth at the cloud arm, as competitors like China Telecom Corp. attracted business customers in recent years.
