Eddie Wu, Alibaba’s New CEO, Stresses the Importance of AI in the Company’s Future
Key takeaways
- Alibaba’s new CEO, Eddie Wu, took over the role on Sunday
- He’s touting the role of AI in the company’s future and wants Alibaba to be “user first”
- The speech came after the sudden departure of Daniel Zhang from the cloud computing business
Alibaba’s new CEO, Eddie Wu, took up the mantle on Sunday and has already been busy waxing lyrical about how the company needs to market AI as soon as possible to survive. In a letter to all employees and a speech on Tuesday, he confirmed the company’s new priorities going forward.
The new CEO faces an uphill battle after the sudden departure of the former CEO from the cloud computing business, which caused Alibaba’s share price to tumble. Wu’s speech didn’t do much to help the share price, which closed further down on Tuesday. Let’s get into the details.
Wu takes up top Alibaba job
New CEO Eddie Wu hasn’t wasted any time letting the company and investors know about his grand scheme to reform Alibaba. “Times are changing, and so must Alibaba! As the world progresses, Alibaba needs to evolve even faster!” Wu said in a letter to all employees on Sunday that was reported in the media.
Wu confirmed on Tuesday that Alibaba’s two main strategic focuses will be “user first” and “AI-driven”, with the company doubling down on its strategic investments in “technology-driven internet platforms”, AI and cloud computing.
Wu also confirmed that he wanted younger management coming through the Alibaba ranks. In the next four years, the company intends to promote those born after 1985 “to form the core of our business management teams,” Wu said.
The move comes as Alibaba undertook the mammoth task of restructuring itself into six separate companies. Wu replaced Daniel Zhang, who stepped down from the role two months ago to focus on Alibaba’s cloud computing business — except he quit the business on Sunday in a dramatic departure.
Alibaba’s stock performance in 2023
Zhang’s unexpected exit from the business triggered a freefall in Alibaba’s share price, while Wu’s enthusiastic commentary on the company’s future failed to convince investors. Alibaba stock has fallen 6.55% in the last five days. So far, the company’s share price has declined 2.65% since the start of the year to hit 86.30 HKD.
Wu has now taken on leadership of the cloud computing business, which is set to be spun off from Alibaba imminently. Back in May, the company said it would complete the IPO for the cloud computing business in the next 12 months.
Zhang will still contribute to Alibaba by “channeling his expertise differently” in a letter from Alibaba and will receive a company first: an emeritus title.
The bottom line
It’s always tough for a new CEO to take the reins, but that job got a little bit harder with Zhang’s unexpected departure and leaving Wu to lead the cloud computing business as well.
Still, Wu is clearly full of optimism about Alibaba’s future and has laid out a clear path towards leaving the company’s regulatory woes behind. Investors’ reaction to the sudden exit might have been pretty typical for the markets, but still a little harsh.
