According to an internal memo seen by Reuters, the new CEO of Alibaba Group, Eddie Wu, has informed workers that the company would place “user first” and “AI-driven” as its two key strategic goals moving ahead.
Wu, who issued the letter on Tuesday, his third day in the top position, also said that Alibaba would prioritize developing young people to become the foundation of its business management teams during the next four years. He notably mentioned individuals born after 1985 in this regard.
He said doing this will keep the business in a “start-up mindset” and prevent it from being “stuck in our old ways.”
The incoming CEO, a founding member of the Alibaba Group and a longtime aide to outgoing CEO Jack Ma is outlining his strategic ambitions at a crucial time for Alibaba, which is going through the most significant organizational restructuring in its 24-year existence.
Late on Sunday, Alibaba also said that Wu will succeed Daniel Zhang as CEO of its cloud computing division.
People were surprised by the revelation since Zhang had announced in June that he was stepping down as CEO of Alibaba Group to concentrate on the cloud business, which aims to go public by May 2024.
The Cloud Intelligence Group is one of five divisions that Alibaba is spinning off as part of its reorganization, with a valuation of $41 billion to $60 billion this year.
The cloud division, which houses the Tongyi Qianwen generative artificial intelligence model for the firm, is Alibaba’s second-largest income generator after domestic e-commerce.
According to Wu’s letter, the disruptions brought about by AI across all industries will be the most major change agent during the next ten years.
“We will be displaced if we don’t keep up with the changes of the AI era.”
Alibaba surpassed analyst forecasts in its first-quarter profits report last month. Still, the combination of problems of growing competition and a slowing Chinese economy have made it difficult for the company to recover from a two-year regulatory crackdown.
The Chinese version of TikTok and PDD Holdings’ (PDD.O) Pinduoduo are two low-cost platforms that domestic e-commerce users are increasingly turning to, leading to Alibaba’s domestic e-commerce arm concentrating on value-for-money markets.
The cloud operation, one of the six business groups, recorded revenue growth of only 4% for the quarter. Still, experts consider it China’s top cloud provider with a 34% market share, topping Huawei Technologies [RIC:RIC: HWT.UL], Tencent Holdings (0700. HK), and Baidu (9888. HK).
