Outgoing Alibaba CEO and Chairman Daniel Zhang sent a memo to staff on Tuesday explaining his reasons for stepping down.
Zhang will bow out in September, while company veteran Eddie Wu will succeed him as CEO, and Joe Tsai will take over as chairman, Alibaba announced Tuesday.
The move comes nearly three months after Alibaba announced plans to split the company into six business groups, each with the ability to raise outside funding and go public.
Zhang will remain CEO of the cloud computing business, as it pushes towards a spin-off and eventual public listing.
“Cloud Intelligence Group is now full speed ahead on its spin-off plans and we are approaching a crucial stage of the process, so it is the right time for me to dedicate my full attention and time to the business,” Zhang said in a memo to staff obtained by CNBC.
“From a corporate governance perspective, we also need clear separation between the board and management team as Cloud Intelligence Group proceeds down the path to becoming an independent public company. It would be inappropriate for me to continue serving as Chairman and CEO of both companies at the same time during the spin-off process.”
Zhang said the decision to step down was part of his own plan.
Zhang’s intentions to only focus on cloud now have been some years in the making. In an interview with CNBC in 2018, Zhang said cloud computing will be the company’s “main business” in the future, underscoring his bullishness regarding the technology.
Read the full memo Zhang sent to Alibaba employees:
My fellow Aliren,
Since becoming CEO of Alibaba Group in May 2015, it has become my custom to send several letters to everyone every year. As many of you have come to expect when receiving such a letter, it often signals a significant organizational change. Today is no exception. This time, however, the news I’m sharing involves an important personal change.
I am pleased to report that our organizational transformation into the “1+6+N” model has been progressing as planned since we made the announcement. During our most recent earnings announcement, we introduced the board of directors for each of the six major business groups, and these entities are now all fully operational. We also announced plans for a series of significant transactions, which include Cloud Intelligence Group’s full spin-off and listing as an independent company, IPOs for Cainiao Smart Logistics and Freshippo, and external capital raising for AIDC. Alibaba will have a brand-new outlook for the future.
As everyone is well aware, the development of core technologies such as cloud computing, big data and AI will lead to a tremendous transformation of our society and is of utmost strategic significance. Cloud Intelligence Group is now full speed ahead on its spin-off plans and we are approaching a crucial stage of the process, so it is the right time for me to dedicate my full attention and time to the business. From a corporate governance perspective, we also need clear separation between the board and management team as Cloud Intelligence Group proceeds down the path to becoming an independent public company. It would be inappropriate for me to continue serving as Chairman and CEO of both companies at the same time during the spin-off process. Therefore, the Alibaba board of directors has discussed and accepted my plan to transition from the role of Chairman and CEO of Alibaba Group to focus exclusively on my role as Chairman and CEO of Cloud Intelligence Group, effective September 10th 2023. In turn, the Alibaba board of directors has appointed Joseph C. Tsai to succeed me as Chairman and Eddie Yongming Wu to succeed me as Chief Executive Officer. As co-founders and partners of the company, Joe and Eddie have made significant contributions to the company’s development and possess a wealth of invaluable experience. I have every confidence that their leadership will guide Alibaba toward new heights.
This change signifies a new phase and new journey, not only for the company but also for me personally. Time flies, and this year marks my 16th year at Alibaba Group. My appointment as CEO and Chairman of Alibaba Group was beyond my imagination. Being able to fully dedicate myself to the roles for as long as I have is truly due to the trust, support, encouragement, and patience I have received from everyone. For this, I am forever deeply grateful. Due to the historical opportunities that emerged through social progress and market development over the past 16 years, I had the privilege of witnessing the rapid growth of Alibaba and participated alongside everyone in so many achievements from inception to maturation that has impacted people’s everyday lives, enabled the digital transformation of businesses, and made positive contributions to society. Together we withstood the challenges brought about by the pandemic and weathered the uncertainties of the macro environment over the past three years. Through prosperity and adversity, we grew stronger, shared unforgettable experiences, and persevered through it all together. I am grateful for the friendships and bonds forged during this journey that is more valuable and meaningful to me than anything else.
Over the past 24 years, we have initiated self-reinvention many times. Today, we are all standing together at a new starting point, hoping to unlock new growth through self-transformation. I know everyone will continue to support Joe, Eddie, and the new senior management team. I hope everyone will find the best path and platform for themselves. Your self-fulfilment will benefit society and the company, but more importantly, hopefuly will help you discover how to be the best version of yourself. The team at Cloud Intelligence Group and I are also standing on a brand new stage, and we will leverage the power of new technology in cloud computing, big data, and artificial intelligence to serve the digital transformation of enterprises of all sizes and industries and capture the massive potential brought about by AI. I am incredibly eager and excited.
My friends, the landscape may evolve, but the mountains remain and the rivers will continue to flow. Let’s start a new chapter. When we meet again, may we all be carefree!
Daniel Zhang
Alibaba Group Chairman and CEO
Alibaba Cloud Intelligence Group Chairman and CEO
2023.6.20
