2023-09-11 09:26:00
Alibaba shares lost more than 4 percent in Hong Kong on Monday, following the group’s former CEO, Daniel Zhang, abruptly left the cloud computing unit, raising investor concern regarding the company’s plans.
Just two months following Chang stepped down from other roles, new group CEO Eddie Wu will become acting CEO and head of a unit grappling with weak sales growth ahead of a planned initial public offering next year.
The Cloud Intelligence Group is Alibaba’s second largest source of revenue following domestic e-commerce, and includes the group’s generative AI model Tongyi Qianwen and the messaging app Dingtalk.
The unit’s revenues decreased for the first time in the January-March period by 2 percent due to project delays and other factors.
However, analysts estimate that it is the largest cloud provider in China with a market share of 34 percent. With an estimated valuation of between $41 billion and $60 billion, the unit is headed toward a major IPO.
However, analysts said the amounts of data it oversees might put it in the crosshairs of regulation as data security and geopolitical concerns grow.
The company said that it will continue its plan to separate the cloud unit under the supervision of a management team that has not yet been appointed.
Earlier this year, it stated that it would complete the process by May 2024.
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