AWS CEO Garman says software AI fears are ‘overblown’
Amazon Web Services CEO Matt Garman suggested investors may be worrying too much about the risk of AI models slowing the growth of major software companies.
“Look, my sense is that a lot of the fear is overblown,” Garman told CNBC’s Jon Fortt on Thursday.
Tech stocks have sold off this year following the launch of software built on top of artificial intelligence models, such as Anthropic and OpenAI.
iShares Extended Technology-Software Sector ETF It’s down 24% so far in 2026, making it the worst year since 2022, as inflation and rising interest rates prompt companies to streamline technology spending post-pandemic.
Analysts have begun labeling the decline in software-as-a-service stocks the “SaaS apocalypse.” Software executives responded by saying key business metrics had not worsened.
Ali Ghodsi, CEO of data analytics software company Databricks, said last week that he thought the correction was an overreaction.
Last week, Amazon said revenue from its market-leading cloud infrastructure segment rose nearly 24% to $35.6 billion in the fourth quarter, a bigger figure than analysts expected. The unit showed an operating margin of 35%, slightly expanding from the previous quarter.
“There is a huge disruption,” Garman said. “AI is absolutely a disruptive force that will change how software is consumed and how it is created. And I would argue that systems of record, SaaS providers, as you call them, and today’s big players have an inside track to win this business. Now, they need to innovate, just like the rest of the world. They can’t stand still. If they stand still, they’re bound to be disrupted.”
AWS generates revenue from established software companies such as: Adobe, Intuition And Zillowand received work from AI model developers. In November, the cloud announced a $38 billion spending commitment from OpenAI, which sells ChatGPT subscriptions as well as models for software developers.
“Our perspective is that our customers are going to consume more computing technology and more infrastructure than they’ve ever had before, whether they run it themselves, build it on AI, buy it from SaaS vendors, or have a mix of those,” Garman said.
Major software companies are releasing AI features, but growth rates have not increased. AWS customer two weeks ago ServiceNow reported that its revenues rose 20.7% year-over-year in the fourth quarter, down from almost 26% two years ago.
Concerns about AI disruption have spread beyond tech software. based in florida Algorithm Holdings He said this on Thursday artificial intelligence product It allows logistics customers to quadruple their freight volumes without increasing the number of staff. CH Robinson Worldwide Shares were down nearly 23% in midday trading.
