China's Alibaba shakes up cloud unit management after scrapping the division's IPO

Alibaba has begun an overhaul of its cloud computing unit, bringing in veterans to new leadership positions, as it looks to revive the division after cancelling its public listing.

The move underscores the Chinese technology giant's desire to tap the boom in artificial intelligence that relies on the infrastructure built up by cloud players.

Alibaba will put a bigger emphasis on three business units within the cloud space — public cloud, hybrid cloud and cloud infrastructure. While these groups existed previously, Alibaba has newly instated executives that oversee the divisions and that report to the company's top leadership.

Weiguang Liu will lead the public cloud division, a person familiar with the matter who was not authorized to speak publicly on it told CNBC, while Jin Li will lead the hybrid cloud unit. Both executives will report to Alibaba's group CEO Eddie Wu, the source said.

Jiangwei Jiang will lead the cloud infrastructure unit, reporting to the cloud division's Chief Technology Officer Jingren Zhou, the person added.

All three executives of the cloud business units are Alibaba veterans. The company was not immediately available for comment.

Chinese publication Leifeng first reported the news.

The shakeup comes after a surprise move by Alibaba last week to cancel the highly-anticipated initial public offering of its cloud unit that led the company to shed more than $20 billion from its value.

Alibaba underwent the biggest restructure in its history this year by way of splitting the company into six business units. Daniel Zhang stepped down from the CEO role in September, then quit as the head of the cloud business weeks later.

Alibaba has faced intensifying competition in China in the cloud market, particularly when pursuing customers in the state-owned enterprise and government sector.

Last week, Wu said the company would put more emphasis on the so-called public cloud, which targets enterprises in China, rather than at government customers.

The company will focus on AI in the cloud, as AI applications require vast amounts of computing power that cloud computing firms can offer. Alibaba hopes to capitalize on this prospect.

"The cloud intelligence group will resolutely implement a strategy of driving growth with AI and of prioritizing public cloud. It will scale up its technology investments in AI-related software and hardware," Wu said.

"In the future, incremental demand for cloud computing will be driven by demand for AI, and most AI computing will run in the cloud."