In the wake of scrapping the highly-anticipated initial public offering (IPO) of its cloud unit, Alibaba has initiated a significant overhaul of its cloud computing division, signaling a strategic shift towards bolstering its capabilities in artificial intelligence (AI). The move underscores Alibaba’s commitment to tapping into the burgeoning AI sector, heavily reliant on the robust infrastructure provided by cloud computing platforms.
Alibaba’s revamped cloud strategy will place increased emphasis on three core business units within the cloud space: public cloud, hybrid cloud, and cloud infrastructure. Newly appointed executives, all seasoned Alibaba veterans, will take the helm of these units, reporting directly to the company’s Group CEO, Eddie Wu.
Weiguang Liu: Appointed to lead the public cloud division.
Jin Li: Tasked with overseeing the hybrid cloud unit.
Jiangwei Jiang: Heads the cloud infrastructure unit.
This leadership reshuffle follows a surprising decision last week to cancel the cloud unit’s IPO, resulting in a significant valuation drop of over $20 billion for Alibaba. The company’s recent restructuring, splitting into six business units, and the departure of Daniel Zhang from the CEO role further highlight Alibaba’s efforts to adapt to evolving market dynamics.
Alibaba faces intensified competition in China’s cloud market, particularly in the realm of state-owned enterprises and government sectors. In response, the company is strategically aligning its focus on the public cloud, targeting enterprises in China, as opposed to government customers.
Eddie Wu emphasized the pivotal role of AI in Alibaba’s cloud strategy, acknowledging that AI applications demand substantial computing power, a forte of cloud computing providers. Wu stated, “The cloud intelligence group will resolutely implement a strategy of driving growth with AI and of prioritizing public cloud. It will scale up its technology investments in AI-related software and hardware.”
Looking forward, Alibaba aims to capitalize on the growing demand for AI-driven applications, foreseeing that the incremental demand for cloud computing will be driven by the increasing need for AI, with the majority of AI computing expected to run in the cloud.