Alibaba Group recently announced that Daniel Zhang will step down as Chairman and CEO effective September 10, replaced by Jospeh Tsai, Group Executive Vice Chairman, and Eddie Wu, Taobao and Tmall Group Chairman.
The change in management, Zhang will focus on developing the cloud business to capture emerging artificial intelligence opportunities and Alibaba Cloud is expected to be fully capable of becoming the leader of the AI industry, said Morgan Stanley in a report.
From a corporate governance perspective, the clear separation of the two companies’ management and boards of directors will ensure more independent decision-making in the IPO preparation process as Alibaba Cloud moves towards a full spin-off, it said.
The relationship between the two companies will become more market-driven, with Alibaba continuing to be Alibaba Cloud’s largest customer and enjoying a cost advantage, it said
Morgan Stanley said that Zhang’s full commitment to the development of Alibaba Cloud this time around is evidence that the cloud unit’s IPO plan is progressing smoothly, which is expected to bring significant capital returns to Alibaba’s shareholders, and that the change in management is not expected to affect the day-to-day operations of Alibaba’s core business, it said.