(Yicai) June 27 -- Alibaba Group Holding has cut by a third the membership of the management group that helps steer the Chinese e-commerce giant’s strategic direction, refocusing the partnership system around the leadership of its core businesses and technology chiefs.

The ranks of the Alibaba Partnership fell to 17 from 26 in the fiscal year ended March 31, as former Chief Executive Officer Daniel Zhang and eight others were retired from the group, Chairman Joe Tsai and CEO Wu Yongming wrote in a letter to shareholders yesterday.

The others were Fang Yongxin, Sun Lijun, Wu Wei, Peng Lei, Dai Shan, Yu Yongfu, Song Jie, and Zhu Shunyan. No new partners were added.

Alibaba’s partnership system, set up in 2009, is a unique governance mechanism designed to preserve the entrepreneurial spirit and grant senior executives much sway over strategy. To qualify, individuals must have served the Hangzhou-based company for at least five years and hold a minimum equity stake. Partners wield board-nominating rights and play a vital role in strategic decision-making, ensuring continuity of culture and vision.

Alibaba has three types of partners: permanent partners, of which there are only two at the moment -- co-founders Jack Ma and Tsai; ordinary partners; and honorary partners, who take up the role after retirement and no longer exercise partnership rights but still enjoy partial dividends and rewards.

Most of those who recently exited the partnership system had left key roles in Alibaba's core businesses over the past two years or had taken secondary positions.

Tsai and Wu also noted that Alibaba's international e-commerce business continues to improve its operational efficiency, and they are confident it will achieve quarterly profitability in the next fiscal year.

Alibaba has invested heavily in its loss-making overseas e-commerce business. On an adjusted earnings before interest, taxes, depreciation, and amortization basis, the international digital commerce group lost CNY15.1 billion (USD2.1 billion) in the 12 months ended March 31, while revenue rose 29 percent from the previous year.

Artificial intelligence represents the biggest source of growth and change over the next decade, Tsai and Wu said. Focusing on this strategic core, Alibaba will increase investment in AI and cloud computing infrastructure, AI basic models and AI-native applications, and the AI-driven transformation of existing businesses, they added.

Alibaba previously announced that it will invest more than CNY380 billion (USD53 billion) in cloud and AI infrastructure over the next three years, exceeding such spending over the past decade. 

The company aims to seize new opportunities and build its tech business, centered on "AI+Cloud," into Alibaba's second growth curve, Tsai and Wu pointed out.

Alibaba's net profit surged 77 percent to CNY126 billion in fiscal 2025, according to its annual financial report released yesterday. Revenue rose 6 percent to CNY996.3 billion.

Editor: Martin Kadiev