The CEO of Amazon's cloud computing business Adam Selipsky is stepping down next month, the company announced Tuesday, punctuating a phase of rapid growth at the division and a broader transition in a tech sector that is scrambling to capitalize on the coming AI-led era.

Matt Garman, senior vice president of sales and marketing at AWS, will replace Selipsky as CEO effective June 3, the company said.

Selipsky departure comes at a high point for AWS. The cloud services unit is rapidly expanding and has reached a significant milestone of generating a $100 billion run rate. Amazon's broader AI strategy runs through AWS, the industry's top cloud service by market share. During the company's most recent earnings report, executives said cloud customers are increasingly signing up for bigger deals with longer commitments, many with generative AI components.

Amazon stock was down just under 1% during morning trading.

"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, said. He took over AWS in 2021.

Selipsky, whose three-year tenure was defined by the pandemic, oversaw the business as companies were reeling from the disruptions of the public health crisis and pulled back from spending. But the cloud division has since posted swelling sales growth.

Last quarter revenue for AWS came in at $25 billion, beating analyst expectations and increasing about 17% compared to the same period last year.

"I’d like to thank Adam for everything he’s done to lead AWS over the past three years. He took over in the middle of the pandemic, which presented a wide array of leadership and business challenges," said Amazon CEO Andy Jassy in a note to employees Tuesday.

Amazon, which has positioned itself as an AI leader, is among the tech giants racing to claim market share and launch new consumer services, largely based around its major cloud services business. Earlier this year Amazon increased its investment in the AI startup Anthropic, committing another $2.75 billion to bring its investment total to $4 billion.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance