In a surprising move, Daniel Zhang, the former CEO and Chairman of Alibaba Group Holding, has announced his departure from the company’s cloud division. Zhang’s decision to step down comes merely two months after he revealed plans to focus on leading the cloud unit as part of a major restructuring effort. The move adds another layer of uncertainty to Alibaba, which has been navigating increased regulatory scrutiny both at home and abroad.
Analysts had previously valued Alibaba’s cloud unit at a substantial $41 billion to $60 billion. However, the immense volume of data it manages have raised concerns about potential regulatory challenges.
In an internal letter to Alibaba’s staff, the company confirmed Zhang’s decision to leave the cloud unit. Zhang had been concurrently managing several roles, including overseeing the entire Alibaba Group and the cloud intelligence unit, China’s largest cloud provider. This cloud unit is expected to be spun off from Alibaba as part of the company’s extensive restructuring.
The letter, signed by Joseph Tsai, an Alibaba co-founder who recently assumed the chairman role from Zhang as planned, acknowledged Zhang’s wish for the transition. “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,” the letter stated.
Despite his departure from the cloud division, Zhang will remain actively involved with Alibaba. The letter emphasised that he will continue to contribute to the company by applying his expertise in a different capacity. To support his endeavours, Alibaba is committing a substantial $1 billion to establish a technology fund initiated by Zhang. This fund aims to bolster Alibaba’s strategy for future growth and further develop its technology ecosystem.
In recognition of his contributions, Alibaba has conferred upon Zhang the title of “emeritus,” marking a historic first in the company’s history.
Zhang took on the role of heading Alibaba’s cloud unit in December after the company experienced a significant service outage, which it described as the “longest major-scale failure” in over a decade. Zhang’s career with Alibaba began in 2007 when he joined as a former accountant. He is widely credited with architecting the company’s annual flagship event, the “Singles Day” shopping festival. In 2015, Zhang assumed the CEO position and later became Chairman in 2019, succeeding both roles from Alibaba’s co-founder, Jack Ma.
During his leadership, Zhang guided Alibaba through a turbulent period marked by heightened regulatory scrutiny and government actions targeting the tech giant. His tenure at the helm saw the company’s share price reaching record highs and lows, reflecting the challenges and opportunities faced by one of China’s most prominent tech companies.
