Alibaba says Daniel Zhang has left the cloud business in a surprise move

SHANGHAI, Sept 10 (Reuters) – China’s Alibaba Group (9988.HK) announced on Sunday that Daniel Zhang will step down from its cloud business, a surprise move just two months after the company said he would leave his two roles as group CEO and chairman to focus on its cloud unit.

Zhang previously held three concurrent roles, heading the group as well as the cloud intelligence unit. The unit is China’s largest cloud provider and is set to be separated from Alibaba as part of the group’s restructuring.

The company announced its decision to leave the unit in an internal letter to employees, which was reviewed by Reuters. Zhang was scheduled to hand over the role of group CEO to Eddie Wu on Sunday, and the letter said Wu would also take charge of the cloud business after Zhang’s departure.

“Our company’s board of directors expresses its deep appreciation to Mr. Zhang for his contributions to the Alibaba Group over the past 16 years,” Alibaba said in a statement simply announcing that Wu would succeed Zhang in his roles in the cloud unit.

The company did not immediately respond to a request to make Zhang available for comment.

The cloud business is a key part of a restructuring announced by the Chinese e-commerce giant in March that split the company into six units, each with its own boards of directors and executives.

Alibaba said in May that it aims to complete the public listing of its cloud unit within the next 12 months. The company said on Sunday that it will continue to implement the spin-off plan within a separate management team to be appointed.

Analysts estimated the cloud unit’s value at between $41 billion and $60 billion, but said the amounts of data it oversees could put it in the crosshairs of regulators at home and abroad.

“Daniel has expressed his desire to transition away from his role as chairman and CEO of Cloud Intelligence Group,” the company said in the letter signed by Joseph Tsai, a co-founder of Alibaba who also took over as chairman from Zhang. Planned for Sunday.

“After careful consideration, Alibaba’s Board of Directors has respected and accepted Daniel’s decision and has appointed Eddie as Acting President and CEO of Cloud Intelligence Group, effective immediately.”

The letter added that Zhang will continue to contribute to Alibaba by “channeling his expertise differently,” saying that Alibaba will invest $1 billion in a technology fund that Zhang will establish. The company also awarded Zhang an “honorary” title, the first of its kind in its history.

“The fund will support Alibaba’s strategy to invest for future growth and further develop our technology ecosystem.”

Zhang took over as head of Alibaba’s cloud unit in December after it suffered an outage that she described as the “longest large-scale failure” in more than a decade.

Zhang, a former accountant, joined Alibaba in 2007 and is best known as the architect behind the company’s flagship annual shopping festival Singles’ Day. He was appointed CEO in 2015 and took over the presidency in 2019, succeeding both roles from Alibaba co-founder Jack Ma.

His final years as group chairman saw him manage the tech giant through a turbulent two years that saw Alibaba heavily targeted by increasing regulatory scrutiny.

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