DingTalk accelerates AI transformation

Author | Liu Baodan

Editor | Zhou Zhiyu

The previously stable DingTalk is about to accelerate its pace.

Recently, Wall Street News learned that DingTalk is strictly enforcing discipline internally, requiring employees to arrive by 9:15 AM, shortening lunch breaks by half an hour, and prohibiting the use of Xiaohongshu during work hours. Insiders at DingTalk stated that the company emphasizes returning to a startup state, and the sense of urgency has indeed returned.

At the end of last month, Alibaba Group planned to acquire the shares of Chen Hang (Wuzhao), the founder of the two hydrogen and one oxygen company, and after the transaction is completed, Chen Hang (Wuzhao) will serve as the CEO of DingTalk. DingTalk President Ye Jun (Bu Qiong) will return to Alibaba Group for another assignment.

Behind this series of appearances, deeper changes are occurring within DingTalk.

An unnamed insider revealed that the strategic weight of DingTalk has changed, with the core focus shifting to AI product development rather than commercialization, as DingTalk's revenue is negligible compared to Alibaba Group's nearly trillion revenue scale.

On Alibaba's AI chessboard, DingTalk's role is becoming increasingly important.

More than a year ago, DingTalk was recognized by Alibaba as a strategic-level innovative business. Eddie Wu believes that DingTalk has gained unprecedented imagination due to the arrival of the AI era. This year, Alibaba's AI has entered a critical strategic period, and the group has new proposals for DingTalk.

On February 24, Alibaba announced an investment of 380 billion yuan to build cloud and AI hardware infrastructure. Two days prior, during Alibaba Group's latest quarterly earnings call, Eddie Wu stated that DingTalk, as the group's most important enterprise-level AI application facing B2B, will leverage AI to reshape internal collaboration and coordination scenarios for enterprises.

At last year's Cloud Summit, Eddie Wu stated that the greatest imagination of generative AI is not to create one or two new super apps on mobile screens, but to take over the digital world and change the physical world. Alibaba's goal is to achieve AGI, which means that AI technology must change productivity, and DingTalk will become the entry point for enterprise services.

Regarding this adjustment, many DingTalk insiders have given positive feedback. One insider expressed that it feels like the company is returning to a startup state, and the pace has picked up. "AI technology is accelerating iteration, and if DingTalk reacts slowly or fails to maintain a flexible iterative state, it may soon be eliminated."

Previously, DingTalk's development pace was relatively steady. In 2023, Alibaba Group underwent the largest structural split in its history, "1+6+N," and subsequently, DingTalk was spun off from Alibaba Cloud, which allowed DingTalk to embark on an independent development path.

DingTalk began exploring commercialization paths, pursuing revenue growth. In November 2024, DingTalk announced its core commercialization progress: the ARR (Annual Recurring Revenue, counted from April 1, 2024, to September 30, 2024) for the first half of fiscal year 2025 far exceeds 200 million USD.

According to Ye Jun's vision, DingTalk will maintain a steady strategic pace, keeping a linear growth rate as a B2B company. He hopes that DingTalk can maintain a revenue growth rate of around 30% over the next 10 to 20 years.

However, in the face of the greatest variable of the AI era, DingTalk's speed needs to be faster, especially to form deep synergy with Alibaba Group's AI strategy The aforementioned informed sources indicated that everyone is eager for a blockbuster application. After Chen Hang returned, he emphasized two things: first, optimizing the product experience, and second, returning to the front line to co-create with users. "The AI to B field needs a flagship product, and we need to find new scenarios to create new AI products."

From the perspective of insiders, it is necessary to think about the various forms of AI to B from the underlying product architecture, as well as what DingTalk should look like. To create an AI-native product, it is essential to get close to customers, understand their needs, and readjust knowledge and products to serve enterprises well. This is not something that can be accomplished in two or three months.

The exploration of AI to B is far more challenging than imagined. From a product perspective, DingTalk is a product with very complex functions and buttons. Users need to bridge a gap in understanding the product, from trying the product to effectively using productivity tools, and the gap in between is enormous.

This is also the fundamental logic that distinguishes DingTalk from AI to C, which has significant scale and traffic effects and can be validated in a short period. In contrast, B-end products are often based on value logic and need to be considered from the perspective of practicality and efficiency.

At the same time, DingTalk faces market competition, whether from Feishu backed by ByteDance or WeChat Work under Tencent, both of which have significant advantages in AI product development and will put certain pressure on DingTalk.

Compared to Ye Jun, Chen Hang also understands DingTalk and does not have historical baggage, allowing him to have more freedom in reform efforts.

Chen Hang was one of Alibaba's earliest interns. As early as 1999, he interned under the current CEO of Alibaba Group, Eddie Wu. In 2015, after the complete failure of the "Laiwang" project, he led the team to develop DingTalk, becoming its soul figure. He left Alibaba to start his own business in 2020.

There may be another reason for Chen Hang's return: Two Hydrogen One Oxygen mainly focuses on cross-border e-commerce, aiming to use AI to create an intelligent shopping experience, and has also worked on headphones and pet products. Chen Hang's experience in product development may be something that Alibaba Group values.

In 2025, DingTalk will usher in its tenth year of development, and it seems that time has returned to the starting point. With Chen Hang's return, this product, which was born for the digitalization of small and medium-sized enterprises, is starting to reinvent itself. This time, what kind of answer will DingTalk deliver?