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New Alibaba CEO elevates AI to key priority in group revamp plan

SHANGHAI – Alibaba Group Holding will put artificial intelligence (AI) and user experience at the top of its priorities, as its new leadership seeks to reclaim customers and market share in a fiercely competitive arena.

Chief executive officer Eddie Wu laid out his vision in a memo to staff on Tuesday for the first time since officially taking over from veteran Daniel Zhang. Mr Wu stressed Alibaba must adjust its approach to go AI-first, while not forgetting the hundreds of millions of users who helped create one of China’s largest corporations. In recent years, however, that lead has come under attack from new rivals in social media such as ByteDance, while the likes of Baidu have invested heavily in AI.

“We will recalibrate our operations around these two core strategies and reshape our business priorities,” Mr Wu said in his note, reviewed by Bloomberg News.

The Chinese e-commerce leader will reinforce strategic investments in the areas of AI-driven tech businesses, Internet platforms and its global commerce network, Mr Wu said.

Mr Wu, who sent the letter on Tuesday, his third day in the top job, also said Alibaba would focus on promoting young employees, specifically citing those born after 1985, to form the core of its business management teams within the next four years.

This would help maintain a “start-up mindset” and prevent the company getting “stuck in our old ways”, he said.

Alibaba’s CEO transition comes as the company is navigating a shifting landscape of fiercer competition from up-and-coming rivals coupled with mounting domestic economic headwinds. While the company is gradually rebounding from a two-year-long tech crackdown imposed by Beijing, it continues to encounter more uncertainties as Mr Zhang unexpectedly quit at the weekend, having only months earlier accepted the role of steering its key Cloud Intelligence Group.

The departure has been seen as indicative of greater sway for the new leadership team, headed up by Mr Wu and group chairman Joseph Tsai.

Mr Wu and Mr Tsai, two of the company’s earliest employees, are long-time close confidants of co-founder Jack Ma and taking over at a critical juncture. After weathering some of the worst blows from China’s tech crackdown, the e-commerce leader has to secure its top spot against competitors like JD.com and upstarts like ByteDance while executing a complex plan to split into six major business units.

Among them, the cloud division is seen as one of the biggest potential growth drivers, should Alibaba be able to capture a large share of the market for providing AI infrastructure and services. Its efforts to raise fresh funds are taking a while – the company put a Hong Kong initial public offering of its Freshippo grocery chain temporarily on hold due to the expected valuation.

Alibaba joined a global race in 2023 to stake out a spot in the emergent field of AI, considered critical to advancing not just tech companies but national strategic imperatives. It was not among those who secured the first batch of regulatory approvals for offering generative-AI services in China, though it has made a splash with integrations of its ChatGPT-like model into its meeting and messaging apps.

“Who is going to run Alibaba Cloud is now the single most important growth question for Alibaba,” said Mr Jeffrey Towson, a partner at TechMoat Consulting. The company has said it will continue the process to independently spin off the cloud unit, which is separately seeking to raise as much as 20 billion yuan (S$3.8 billion), with potential backers including Chinese state enterprises. BLOOMBERG, REUTERS

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