Alibaba Pivots Strategy to Boost Public Cloud Focus on AI, Amid Executive Reshuffling and IPO Cancellation

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SMEBRNovember 24, 20:11
Alibaba Pivots Strategy to Boost Public Cloud Focus on AI

Mark Schiefelbein/Associated Press/ NYTimes

Alibaba has begun a reorganization of its cloud computing unit, enlisting experienced leaders to drive the division's revival following the cancellation of its public listing. This move highlights the Chinese tech giant's ambition to capitalize on the growing demand for artificial intelligence, leveraging the infrastructure established by cloud service providers.

Alibaba is placing increased importance on three specific business units within the cloud domain—public cloud, hybrid cloud, and cloud infrastructure. Although these units were present before, Alibaba has now introduced new executives to supervise these divisions, and they will directly report to the company's senior leadership.

Weiguang Liu has been appointed to head the public cloud division, CNBC reports. Simultaneously, Jin Li will take charge of the hybrid cloud unit. Both executives are set to report directly to Alibaba's Group CEO, Eddie Wu.

Jiangwei Jiang is set to head the cloud infrastructure unit and will report to Jingren Zhou, the Chief Technology Officer of the cloud division. All three leaders in the cloud business units have extensive experience at Alibaba.  

The recent reorganization follows a surprising decision by Alibaba last week to cancel the much-anticipated initial public offering of its cloud unit, resulting in a loss of over $20 billion in the company's overall value. This year, Alibaba underwent its most significant restructuring to date, dividing the company into six distinct business units. In September, Daniel Zhang resigned from the CEO position and subsequently stepped down as the head of the cloud business a few weeks later.

Alibaba has encountered escalating competition in the Chinese cloud market, especially in its efforts to attract customers in the state-owned enterprise and government sector.

In a statement last week, Wu announced a shift in the company's strategy, with a heightened focus on the public cloud, specifically targeting enterprises in China rather than government customers. The focus will be on leveraging the capabilities of cloud computing to provide substantial computing power, particularly for artificial intelligence applications. Alibaba aims to capitalize on the significant potential in the AI sector, where cloud computing companies can play a crucial role due to the extensive computational requirements of AI applications.

“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,” Wu said.

“In the future, incremental demand for cloud computing will be driven by demand for AI, and most AI computing will run in the cloud.”

This information was extracted from CNBC.