BEIJING, September 13 (TMTPost)— In his first letter to the whole employees as Alibaba Group’s CEO, Eddie Yongming Wu listed user and artificial intelligence (AI) as essence of the company’s long-term strategies.

Credit：Visual China

Eddie Wu announced in the letter that Alibaba has decided to focus on two strategies to adapt to the new trending of the internet industry: one is to go user-first; another is to be AI-driven. He said the company will recalibrate its operations around these two strategies and reshape its business priorities.

“In the past 24 years, Alibaba has seized the trend of the times, used Internet technology, and achieved rapid growth. Today, the serious homogenization of traditional internet modes has led to stock competition, and new technologies led by AI are turning into new momentum for global business development,” Wu said at the letter. “Alibaba has to carry out self-innovation to find the key to the future, adhere to its original intention of solving problems for society, fulfill its mission of serving small and medium-sized enterprises, and stay committed to its vision of being a good company that is beneficial to society.”  

Over the next decade, the most significant change agent will be the disruptions brought about by AI across all sectors, Wu noted. “In the AI era, we must reshape user value with the determination to start a business again, so that we can have the opportunity to continue serving customers in the coming decade,” the chief executive said. He warned Alibaba would be displaced if it doesn’t keep up with the changes of the AI era.

Wu urged all Alibaba businesses to make their judgments on trends in the next five years and encouraged them to make strategic investment and product innovation early. He pledged to promote young employees and create the culture and environment for more young peopole to become Alibaba’s core strength. Alibaba aims to make those born after 1985 and born in 1990s the core member of its business management team in four years, Wu said.

Wu’s letter came after Alibaba embraced the most significant governance overhaul in its history and the management reshuffle accordingly.

Alibaba announced in late March to split into six business groups, including Taobao Tmall Group, Alibaba International Digital Commerce Group, Local Services Group, Cainiao Smart Logistics Network Limited, Cloud Intelligence Group, Digital Media and Entertainment Group. Five of these major business groups have the flexibility to raise external capital and potentially to seek its own IPO, with the exception of Taobao & Tmall Group, which will remain wholly-owned by Alibaba Group. Each business group is fully responsible for its performance, with financial independence.

Less than three months later, Alibaba said that Zhang would step down from both Chairman and CEO to focus on its cloud unit in September, succeeded by the Executive Vice Chairman Joseph Tsai as the Chairman, and Eddie Wu, the Chairman of Taobao and Tmall, as the new CEO.

Alibaba completed the management transition on September 10, which means from the day on, Joseph Tsai serves as Alibaba’s Chairman and Eddie Yongming Wu became CEO, Tsai said in his internal letter to employees on Sunday. What was unexpected is that Zhang was also resigned as head of Alibaba Cloud Intelligence Group. Zhang said in June that a key reason for his quit as company chief is to focus on spin-off of the cloud business. Zhang at that time vowed to strengthen the cloud unit’s market leadership by making cloud computing and AI more accessible for businesses of all sizes and industries, adding AI “has also opened up exciting new opportunities that Alibaba Cloud is well-positioned to capture."

According to Tsai’s letter Sunday, the board of directors accepted Zhang’s resignation application as the company is on the track of a smooth transition, and decided to name Eddie Wu as the acting chairman and CEO of Alibaba Cloud Intelligence Group. Alibaba tried to ease investors’ concern about the plan to fully spin off the cloud unit by May, 2024. The company said it will proceed with the spinoff plan for Alibaba Cloud Intelligence Group that previously announced. The filling suggested Alibaba’s cloud arm would stay committed to its initial public offering (IPO) plan despite Daniel Zhang’s abrupt departure.

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