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'AI Fears Are Overblown,' says AWS CEO amid software sell-off

Friday, February 13, 2026 — 17:01:50 (UTC)

“AI Fears Are Overblown,” Says AWS CEO Amid Software Sell-Off

Seattle, Feb. 13, 2026— Amazon Web Services (AWS) CEO Matt Garman has pushed back against concerns that artificial intelligence is undermining traditional software companies, describing recent market fears as “overblown.”

Garman addressed the AI-driven sell-off in software stocks as analysts increasingly refer to the downturn as a potential “SaaS apocalypse.” The iShares Expanded Tech-Software Sector ETF has fallen 24% year-to-date in 2026, putting it on track for its worst annual performance since 2022.

This follows the rapid rollout of AI-powered tools from companies including OpenAI and Anthropic, which have fuelled concerns that traditional software providers could see slowing growth.

Despite volatility across the software sector, AWS reported stronger-than-expected fourth-quarter results. Revenue from its cloud infrastructure division increased 24% year over year to $35.6 billion, while operating margins reached 35%, slightly improving on the previous quarter. The performance suggests continued enterprise demand for cloud infrastructure even as investors reassess software valuations.

Jason Kurtz, CEO of Basware commented: “The idea that AI will replace software is simply not accurate. Some even say AI will ‘eat software,’ but AI can’t replace something that isn’t dying. Instead, AI has to be embedded within software. AI depends on workflow, user experience, clean data, and context, all of which live inside enterprise software systems.

Our latest research highlights that ROI on AI investments in finance has nearly doubled in the past year, from 35% to 67%, and for agentic AI, it’s even higher, at 80%. When AI agents are embedded inside operational software, they don’t just predict outcomes, they execute work securely, at scale. That’s where measurable ROI happens.”

“There’s a huge disruption,” Garman said. “AI is absolutely a disruptive force that’s going to change how software is consumed and how it’s built. And I would argue that the systems of record, as you call them, the SaaS providers and the large 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.”

AWS continues to generate revenue from major enterprise software companies including Adobe, Intuit and Zillow, while also expanding its footprint with AI model developers. In November, AWS announced a $38 billion cloud spending commitment from OpenAI, underlining its growing role in supporting AI infrastructure.

While AI is reshaping the broader software ecosystem, AWS leadership remains confident on long-term growth, maintaining that customers will continue to increase their consumption of compute and infrastructure, whether through SaaS vendors, in-house development or AI-powered platforms.

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Source: Company press release.

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