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Alibaba Group Holding will sharpen its strategic focuses on two main themes – "user first" and "artificial intelligence (AI)-driven" – as the Chinese tech giant grapples with growing competition and a shifting internet landscape, according to new group CEO Eddie Wu Yongming.

"As traditional internet models become increasingly homogeneous and face the competitive pressures of saturation, new technologies such as AI are emerging as the new engine of global business growth," Wu, who assumed his new role on Sunday, wrote in an internal letter sent to employees on Tuesday morning.

"Over the next decade, the most significant change agent will be the disruptions bought about by AI across all sectors," Wu said in the letter.

Alibaba also revealed that Eddie Wu would simultaneously serve as the CEO of the company’s cloud computing unit, a position previously held by Daniel Zhang. Zhang had announced his intention to step down as Alibaba Group CEO in June to focus on the cloud division, which is gearing up for an IPO by May 2024.

The Cloud Intelligence Group, valued at an estimated $41 billion to $60 billion in the current year, holds a pivotal role in Alibaba's portfolio. It is the company’s second-largest revenue source after its domestic e-commerce division and houses the highly acclaimed generative artificial intelligence model, Tongyi Qianwen.

"If we don't keep up with the changes of the AI era, we will be displaced."

As part of its business transformation, Alibaba would strengthen its strategic investments in three areas: technology-driven internet platforms, AI-driven tech businesses and global commerce networks, Wu said. "We will recalibrate our operations around these two core strategies and reshape our business priorities," he said.