According to an internal memo seen by Reuters, the new CEO of Alibaba Group Eddie Wu has informed staff that the company’s two key strategic priorities moving ahead would be “user first” and “AI-driven.”
Wu, who issued the letter on Tuesday, his third day in the top position, also stated that Alibaba would prioritize developing young people to become the foundation of its business management teams within the next four years. He notably mentioned individuals born after 1985 in this regard.
He claimed that doing this would keep the business in a “start-up mindset” and keep it from becoming “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 history.
Late on Sunday, Alibaba also disclosed that Wu would succeed Daniel Zhang as CEO of its cloud computing division.
Many people were surprised by the revelation because Zhang had announced in June that he was stepping down as CEO of Alibaba Group to concentrate on the cloud division, 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 restructuring, 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 revenue generator after domestic e-commerce.
The disruptions brought about by AI across all industries will be the most major change agent during the next ten years, according to Wu’s letter.
“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, but 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, which has led Alibaba Group‘s domestic e-commerce arm to concentrate on value-for-money markets.
The cloud operation, which is one of the group’s six business groups, recorded revenue growth of just 4% for the quarter, but analysts consider it to be 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).
