Amazon Web Services CEO Matt Garman suggested investors may be too worried about the risk that artificial intelligence models will slow the growth of big software companies.
“Look, my own opinion is that a lot of the fear is overblown,” Garman told CNBC’s John Fort on Thursday.
Technology stocks sold off this year following the release of software built on AI models from companies like Anthropic and OpenAI.
of iShares Enhanced Technology Software Sector ETF Rising inflation and interest rates are prompting companies to rationalize post-pandemic technology spending, which is down 24% so far in 2026, on par with the worst year since 2022.
Analysts are calling the decline in software-as-a-service stocks the “SaaS apocalypse.” Software executives responded by saying core business metrics had not deteriorated.
Ali Godoshi, CEO of data analytics software company Databrix, said last week that he believed the revision was an overreaction.
Amazon last week said fourth-quarter revenue for its market-leading cloud infrastructure division rose about 24% to $35.6 billion, which was higher than analysts expected. The segment’s operating margin was 35%, expanding slightly from the previous quarter.
“There’s a lot of confusion going on,” Garman said. “AI is definitely a disruptive force and will change the way software is consumed and built. And I would argue that systems of record, so-called systems of record, have the internal trajectory for today’s SaaS providers and large enterprises to win that business. Now they have to innovate like the rest of the world. They can’t stand still. If they stand still, they will definitely be disrupted.”
AWS generates revenue from established software companies such as: adobe, intuition and Jirowon business from an AI model developer. In November, Cloud announced a $38 billion spending commitment from OpenAI, which sells ChatGPT subscriptions plus a model for software developers.
“Our view is that customers are going to consume more computing technology and more infrastructure than ever before, whether they run it in-house, build on top of AI, buy from a SaaS vendor, or some combination of those,” Garman said.
Big software companies are releasing AI capabilities, but their growth rates aren’t skyrocketing. 2 weeks ago AWS Customer ServiceNow The company reported a 20.7% year-over-year increase in fourth-quarter revenue, but down from nearly 26% two years ago.
Concerns about AI disruption extend beyond technology software. Florida based Algorithm Holdings announced Thursday that its AI product allows its logistics clients to quadruple their cargo volume without increasing headcount. CH Robinson Worldwide Shares were down about 23% in midday trading.
