Amazon Names New AWS Chief as AI Race With Microsoft Heats Up

Amazon.com Inc.’s newly named cloud chief, Matt Garman, inherits a $100-billion-a-year business that’s as profitable as it has ever been. He also faces the daunting task of retaining the cloud-computing pioneer’s edge in the artificial intelligence age.

A longtime Amazon Web Services engineering leader who was most recently sales chief, Garman, 48, will assume one of the most prominent positions in the technology industry when he succeeds Adam Selipsky next month.

Selipsky, who has led AWS since 2021, will relinquish the role on June 3 “to move onto his next challenge,” Amazon Chief Executive Officer Andy Jassy said in an email to employees on Tuesday. 

The cloud unit, the world’s largest seller of rented computing power and data storage, has long accounted for most of Amazon’s operating income, serving as a cash machine that gives the parent company flexibility to make big investments in other areas. 

But AWS struggled in the last two years when businesses trimmed their technology spending following pandemic-era splurges. The cloud unit’s growth slowed to a record low last year, which executives attributed in part to Amazon’s own efforts to help customers save money. The unit held its largest-ever layoffs a year ago and has continued trimming since, even as it continues to hire for specific areas.

The division also stumbled out of the gate in the race to commercialize a new generation of artificial intelligence services, lagging behind rivals Microsoft Corp. and Alphabet Inc.’s Google in bringing to market the systems that power such products as OpenAI’s ChatGPT. 

Early versions of AWS’s AI products were deemed insufficient by some customers. Since then, the company has invested $4 billion in Anthropic, a well-regarded builder of generative AI tools. AWS is also building its own tools to rival ChatGPT and has partnered with other companies to power AI services with its servers. 

So while Microsoft and Google are widely seen as leaders in generative AI — which responds to users’ prompts with newly created text, voice or images — Amazon expects to reap tens of billions of dollars in AI-related business for years to come. 

“Regardless of how much or how little Adam Selipsky is responsible for AWS’s progression in AI, as CEO, he owns the outcome,” said Corey Quinn, the chief cloud economist at the Duckbill Group, a consulting firm that advises AWS clients. “And the outcome has not been terrific.”

Selipsky, 57, said in a note to employees that he would “take the opportunity to spend more time with family for a while, recharge a bit, and create some mental free space to reflect and consider the possibilities.” A spokesperson for AWS declined to comment beyond the executives’ memos. 

Selipsky was Jassy’s right hand during the cloud group’s early years, serving in a chief operating officer-like capacity that saw him lead sales, marketing and other roles. He left in 2016 to run Tableau, a Seattle builder of data visualization tools later sold to Salesforce Inc., before returning three years ago. His second stint at Amazon was a surprise to many AWS employees who had expected the job to go to Garman. 

Garman interned at Amazon in 2005 while still in business school at Northwestern University, and joined full-time the following year, helping to launch some of the first AWS products. He went on to run engineering teams working on Amazon’s on-demand computing power services, and began leading AWS’s sales and marketing teams in 2020, a sign to close watchers of the company that he was being groomed for the top job. 

Practiced Humility

People who’ve worked with Garman describe him as a detail-oriented engineering manager in the Amazon mold, brimming with self-confidence and a practiced humility when dealing with customers or entering new markets. Like many of Amazon’s senior executives, he’s not considered a polished public speaker or gladhander. Garman doesn’t shy away from confrontation, challenging the assumptions of product teams in meetings and drilling down on specific data points.

“Matt has an unusually strong set of skills and experiences for his new role,” said Jassy, who led AWS from its inception in the early 2000s until he was named to Amazon’s top job in 2021. “He’s very customer focused, a terrific product leader, inventive, a clever problem-solver, right a lot, has high standards and meaningful bias for action.” 

Garman said he’ll announce organizational changes in the coming weeks. One arrived on Tuesday: Amazon’s sustainability teams, which had reported to Selipsky, will move to communications chief Drew Herdener’s organization.

Shortly after he started at AWS, Garman was asked by a business school pal who worked in another Amazon unit how things were going at AWS, which at the time was a counterintuitive bet by an online retailer. Garman replied that he thought AWS would someday be a $1 billion business. His friend scoffed, Garman told Bloomberg in 2019. 

By the time AWS publicly disclosed its sales almost a decade after that conversation, AWS was on track for almost $8 billion in annual sales.

“We thought it would take a lot longer,” Garman said.

This article was generated from an automated news agency feed without modifications to text.