Alibaba Group Holding Limited (NYSE: BABA) prepared to part with Daniel Zhang as the Chair and CEO of its cloud business.
In June, Zhang departed as the Chair and CEO of Alibaba Group, and Eddie Wu took charge as the CEO and Joseph Tsai as the Chair, effective September.
Alibaba tapped Wu as the Chair and CEO of the cloud business on an interim basis, CNBC reports.
Zhang has been the Alibaba Group CEO since 2015 and the group Chair since 2019. He has also been chairman and CEO of the Alibaba Cloud Intelligence Group since 2022.
The Cloud Intelligence Group, which houses the group's generative artificial intelligence model Tongyi Qianwen and messaging app Dingtalk, is Alibaba's second-biggest revenue source after domestic e-commerce.
Alibaba's cloud unit is heading for a bumper IPO with an estimated $41 billion - $60 billion, likely to be complete by May 2024.
Analysts estimate Alibaba Cloud China's largest cloud provider with a 34% market share.
Citi analyst Alicia Yap saw Zhang's departure weighing on Alibaba's share price until a successor is named, affecting the timing and process of AliCloud's spin-off.
Vey-Sern Ling of Union Bancaire Privee and Li Chengdong of Beijing-based think tank Haitun hail Zhang's departure as positive, considering his lack of material contribution to the unit.
In March, Alibaba shared plans to reorganize its businesses into six independently run entities: Cloud Intelligence Group, e-commerce under Taobao-Tmall, Cainiao's smart logistics operations, Local Services group, Global Digital Business Group, and the Digital Media and Entertainment Group.
In August, Alibaba reported first-quarter FY23 revenue growth of 14% year-on-year to $32.29 billion, beating the consensus of $31.20 billion. Non-GAAP earnings per ADS of $2.40 beat the consensus of $2.02.
Cloud Intelligence Group grew by 4% Y/Y to $3.47 billion.
Price Action: BABA shares traded lower by 0.72% at $89.40 premarket on the last check Monday.