Amazon Web Services chief steps down amid AI race with rivals

Amazon has announced that the head of its cloud business will be replaced by a company veteran who will help steer the tech giant as it races rivals such as Google and Microsoft to develop artificial intelligence products. 

In an unexpected leadership change revealed on Tuesday, Adam Selipsky, the chief executive of Amazon Web Services, will step down to “move on to his next challenge” on June 3. He will be replaced by Matt Garman, who currently serves as senior vice-president of sales, marketing and global services at AWS.

Amazon chief Andy Jassy said that at the time that Selipsky was appointed three years ago, they agreed he would only serve in the AWS role “for a few years”.

AWS is a core profit driver for Amazon and is at the heart of its work in generative AI. The unexpected leadership changeover comes as the company battles its Big Tech competitors to unveil new AI products and services for cloud computing customers.

Selipsky has overseen the recent acceleration of sales growth at Amazon’s cloud division following a broader downturn in the sector that saw customers pull back on IT spending.

Sales at AWS rose 17 per cent year on year to $25bn during the first quarter, beating analyst forecasts, while the division’s profit margins widened to 38 per cent, compared with 30 per cent in the previous quarter. AWS also generated more than 60 per cent of Amazon’s operating income during the period.

Before taking over the top job at AWS, Selipsky served as CEO of software company Tableau for five years, and before that he spent 11 years as vice-president of AWS sales, marketing and support. Selipsky’s successor, Garman, started at Amazon as an intern in 2005 and has worked at AWS full time since 2006.

“Adam leaves AWS in a strong position, having reached a $100bn annual revenue run rate this past quarter,” said Jassy on Tuesday, adding that Garman “has an unusually strong set of skills and experiences for his new role.”

“Given the state of the business and the leadership team, now is an appropriate moment for me to make this transition, and to take the opportunity to spend more time with family for a while,” said Selipsky.

Garman said there would be some “organisation adjustments” at AWS announced in the coming weeks, and that he was “more optimistic than I have ever been for the potential for innovation and growth ahead of us”.