AWS CEO Matt Garman isn’t convinced AI spells doom for the software industry – but admits providers will “have to innovate” to stay afloat

AWS CEO Matt Garman doesn’t appear concerned about the long-term impact of AI on the software industry, but admits there will be some disruption.

Speaking during an interview with CNBC, the AWS chief said recent concerns about software stocks have been blown out of proportion despite widespread sell-offs.

“Look, my opinion is that much of the fear is overblown,” he told CNBC, albeit acknowledging that “there’s a huge disruption” underway in the industry.

Garman’s comments come in the wake of huge market disruption sparked by the launch of recent AI solutions, particularly Anthropic’s Claude Cowork tool.

The launch of the tool, which includes sector-specific plug-ins aimed at automating tasks in areas such as legal, marketing, sales, and data analytics, spooked software investors amid fears the technology could render some provider solutions obsolete.

The subsequent sell-off hit stocks of software companies operating in all of the aforementioned industry verticals.

Last week, the S&P 500 software and services index slipped nearly 5%, losing $830 billion in market value across six straight days of devastating losses.

Across 2026 so far, the iShares Expanded Tech-Software Sector ETF, which tracks software stocks, shows a 24% dip, marking its worst year since 2022.

The SaaS industry has to innovate

While Garman told CNBC the situation has been overblown, he did concede that the current state of affairs in the industry will make things challenging for software providers.

That doesn’t necessarily mean the end of the road for these companies, however. The reality is that they’re operating in an increasingly competitive landscape and will have to work harder for market share moving forward.

“AI is absolutely a disruptive force that’s going to change how software is consumed and how it’s built,” he said.

“The SaaS providers and the larger players of today have an inside track to winning that business. Now, they have to innovate, just like the rest of the world. They can’t stand still. If they stand still, they’re absolutely going to be disrupted.”

Garman isn't alone in shutting down hysteria

Garman isn’t alone in his skepticism. As ITPro reported last week, Nvidia CEO Jensen Huang displayed an optimistic outlook on the future of the software industry during an appearance at the Cisco AI Summit.

Asked whether AI will render the industry obsolete, Huang thoroughly dismissed the idea.

“There’s this notion that the tool in the software industry is in decline, and will be replaced by AI…it is the most illogical thing in the world, and time will prove itself,” he told attendees.

Databricks CEO Ali Ghodsi also shook off concerns during an interview in the wake of a recent financial report. Speaking with Techcrunch, Ghodsi took a similar tone to Huang.

“Everybody’s like, ‘Oh, it’s SaaS. What’s going to happen to all these companies? What’s AI going to do with all these companies?’ For us, it’s just increasing the usage,” he said.

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