TCS, Infosys, Salesforce and other software companies, Amazon Web Services CEO Matt Garman agrees that wipe out in your market value is overreaction; says: Much of the fear is …

Amazon Web Services CEO Matt Garman thinks investor fears about artificial intelligence (AI) threatening major software companies are “overblown.” He has pushed back against market concerns that have erased more than $250 billion from global software stocks this month.“Much of the fear is overblown,” Garman told CNBC, addressing what analysts have labelled a “SaaSpocalypse“ following the release of AI-powered software tools from companies like Anthropic and OpenAI. The market panic began after AI startup Anthropic released 11 open-source plugins for its Claude Cowork tool last month, triggering a widespread sell-off in software-as-a-service stocks. The sell-off hit companies globally as investor fear hit software stocks in India, Japan, and China. “There’s a huge disruption. 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,” Garman added.Earlier this month, Indian IT stocks fell 6.3%, including Wipro going down nearly 5% and Infosys down 7.3%. Recently, TCS dropped to its lowest level since September 2020. Meanwhile, US-based Salesforce went down 4.8% last week.China’s CSI Software Services Index dropped 3%, Hong Kong-based Kingdee International Software Group fell more than 13%, and Japanese firms Recruit Holdings and Nomura Research declined 9% and 8%, respectively.

What AWS CEO Matt Garman said about his company’s revenue prospects in this market

AWS earns money from big software firms such as Adobe, Intuit, and Zillow. The cloud company also won deals with developers of AI models. In November 2025, the cloud company revealed a spending commitment of $38 billion from OpenAI, which offers software developers its models in addition to its ChatGPT subscriptions.“Our perspective is that our customers are going to consume more compute technology and more infrastructure than they ever have, whether they run it themselves, whether they build it on top of AI, whether they buy it from SaaS vendors, whether they have some mix of that,” Garman noted.Major software companies have been releasing AI features, but their growth rates have not spiked. Two weeks ago, AWS customer ServiceNow reported that revenue increased 20.7% year over year in the fourth quarter, down from almost 26% two years earlier.

Technology software is not the only sector that is facing concerns about AI disruption

Concerns about AI disruption have spread beyond technology software. Florida-based Algorhythm Holdings said on Thursday that an AI product is enabling logistics clients to quadruple freight volumes without raising headcount. C.H. Robinson Worldwide shares were down about 23% in midday trading.The selloff began after AI startup Anthropic released 11 open-source plugins for its Claude Cowork tool last month. Claude Cowork is an AI assistant for non-technical professionals that manages files, drafts documents, and automates workflows. One of the plugins the company rolled out was for legal work, automating contract reviews and compliance checks. Despite disclaimers requiring attorney review, the legal plugin triggered investor panic.Legal tech stocks were affected significantly. Thomson Reuters dropped over 15%, RELX fell 14%, and LegalZoom declined nearly 20%. The panic spread globally over this week and wasn’t confined to legal tech stocks.