AWS: Adobe, Incumbents Can Turn AI Disruption into Cloud-Powered Product Advantage

Adobe Poised to Turn AI Disruption into Product Advantage, AWS Says

Adobe and other established software vendors are in a strong position to capitalise on the surge in AI-driven cloud demand, according to comments from Amazon Web Services (AWS) chief executive Matt Garman. Speaking to CNBC, Garman says the market is overstating the risk that generative AI will hollow out incumbents, and that companies like Adobe have an "inside track" if they keep innovating on cloud-enabled AI services.

Adobe's core businesses — Creative Cloud, Document Cloud and Experience Cloud — are positioned to leverage increased compute and infrastructure usage as customers deploy and consume AI capabilities. Garman notes AWS continues to generate revenue from long-standing enterprise software customers such as Adobe, and predicts demand for cloud compute will expand whether enterprises run models in-house, buy from SaaS vendors or adopt hybrid approaches. For Adobe, that implies opportunities to integrate larger foundation models into workflows, accelerate inference-heavy features, and offer scalable, subscription-based AI tooling that builds on its existing customer relationships.

The AWS narrative is reinforced by the cloud provider's own performance: fourth-quarter cloud revenue rises about 24% to $35.6 billion, with a 35% operating margin, and the unit is attracting AI model developers, including a reported $38 billion spending commitment from OpenAI. Garman warns incumbents cannot stand still or they will be disrupted, pointing to peers such as ServiceNow — which reports continued double-digit growth — as examples that innovation coupled with cloud partnership can sustain expansion even as the software industry shifts around AI capabilities.

Cloud compute demand climbs as models scale

AWS projects customers will consume more compute than ever as foundation models become embedded in applications. That trend benefits software firms that can re-architect products to offload heavy model inference to cloud providers, offer managed AI features, and support mixed deployment models combining on-premises and cloud infrastructure.

Market reaction and industry fundamentals

While technology-sector multiples face pressure from macro factors, Garman and other executives characterise recent market churn as an overreaction rather than a structural collapse. Analysts note that despite a short-term reassessment of valuations, many vendors retain resilient customer demand and are refocusing investments on AI-enabled product evolution.