Hours after rumors started circling in China about a possible stepdown of Alibaba’s chairman and CEO Daniel Zhang, the ecommerce behemoth confirmed midday on Tuesday that the executive will hand over the torch.

Zhang will be replaced by Joe Tsai, Alibaba’s current executive vice chairman, as chairman, and Eddie Wu, current chairman of Alibaba’s marketplaces Taobao and Tmall, as CEO and director of the board.

Wu, who served as the chief architect of several Alibaba tech platforms, is celebrated internally as spearheading the firm’s transition to the mobile era by launching Taobao’s mobile app.

After the transition, which will take effect in September, Zhang will focus on leading Alibaba’s cloud intelligence group, which includes the firm’s cloud computing business, large language model endeavors and enterprise messenger Dingtalk. The group was recently spun out as part of Alibaba’s pivotal reorganization to split itself into six entities, some of which are pursuing independent IPOs.

Alibaba has a history of reshuffling executives regularly to meet new challenges that arise. Zhang succeeded Jack Ma as CEO and chairman respectively in 2015 and 2019.

Zhang’s transition, which was self-initiated and approved by Alibaba’s board of directors, doesn’t come as a surprise given the executive has been leading the cloud group as chairman and CEO for a while.

Furthermore, with the explosive growth of AI applications sparked by new large language models, Alibaba’s cloud group is suddenly gaining renewed attention. In April, the firm announced plans to integrate its large language model Tongyi Qianwen into its family of businesses, such as enterprise communication and e-commerce.

Alibaba’s cloud business generated $2.7 billion in revenue during the first quarter of this year, making up 9% of its total revenues.

Alibaba CEO Daniel Zhang to pass the torch and focus on cloud by Rita Liao originally published on TechCrunch