Amazon Web Services CEO Adam Selipsky to step down

Adam Selipsky, CEO of Amazon‘s cloud computing business, will step down from his role next month, the company announced Tuesday.

Matt Garman, senior vice president of sales and marketing at Amazon Web Services, will succeed Selipsky after he exits the company on June 3, Amazon said.

In a memo to employees, Selipsky said he was leaving AWS after about 14 years to spend more time with his family, and said “the future is bright” for the juggernaut cloud business.

“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, recharge a bit, and create some mental free space to reflect and consider the possibilities,” Selipsky wrote.

Amazon CEO Andy Jassy wrote in a separate memo that Selipsky has “deftly led the business” and said Garman, an 18-year veteran of the company, has “an unusually strong set of skills and experiences for his new role.”

In 2021, after Amazon announced that Jassy would take the helm from Jeff Bezos as Amazon’s CEO, many people speculated that it was Garman who would replace Jassy as the head of AWS. Instead, Amazon tapped Selipsky, then the CEO of Salesforce-owned data visualization software maker Tableau, for the role.

During Selipsky’s three years as CEO, AWS has confronted numerous challenges with its business, including a marked deceleration in revenue growth as rising interest rates caused companies to trim their cloud spend. Since last year, AWS has undergone at least two rounds of layoffs as part of broader cuts at the company that resulted in more than 27,000 employees being let go.

At the same time, it has had to respond to a surge in demand for generative artificial intelligence services, spurred largely by Microsoft-backed OpenAI. Under Selipsky, Amazon invested $4 billion Anthropic, a startup established by former OpenAI employees. As part of the arrangement, Anthropic agreed to designate AWS as its “primary” cloud provider and use AWS’ custom-built AI chips.

Its dominant cloud position has also been threatened by Microsoft’s fast-growing Azure cloud business. When Selipsky took over for Jassy in 2021, analysts estimated that Azure was about 61% of AWS. Now, it’s approaching 77%. Microsoft invested billions in OpenAI and its Azure cloud supplies the startup with computing resources.

AWS is still the cloud leader, and it remains one of Amazon’s most profitable business units. It generated $9.42 billion in operating income, or about 62% of Amazon’s total, in the most recent quarter.

Selipsky’s compensation for 2022 was $41.1 million, with $40.7 million generated in stock awards, according to a securities filing. He didn’t receive stock grants this year.

For Jassy, it marks the latest high-profile exec exit.. Amazon’s devices chief Dave Limp left the company last August to join Bezos’ rocket venture Blue Origin. Chris Vonderhaar, an AWS VP, announced his departure last May, while executives overseeing Amazon’s Alexa and hardware research and development groups retired in October 2022.

— CNBC’s Jordan Novet contributed to this report.