Are internal Amazon projects cross charged for their AWS use? Or is it essentially free for internal use?
They're cross-charged with lots of internal book-keeping. The rates teams "pay" internally are different from public pricing of course but expensive things externally are still expensive things internally. The cost-accounting used to be (3+ years ago) much more "just looking...no pressure to keep them down", but recently there's been huge efforts to bring internal AWS costs down, especially for EC2 usage. I heard rumors that much of the Prime Day fiasco this year could have been avoided if teams would have been permitted to spin up enough capacity.
Meanwhile he was deploying some machine-learning categorization stuff he was working on to some cluster that would cost five figures of compute each time, and nobody batted an eye.
Also you have to jump through pretty extreme hoops if your hardware estimates (usually made at least 3 months out) were under-shot and now your service is redlining. This leads to teams way over-estimating their hardware needs and thus millions being spent on idle reserved EC2 capacity. So now they police (with savagery) idle capacity, so services or workloads that are "bursty" are basically an internal-bureaucracy nightmare.
It's much nicer to use AWS outside of Amazon :)
Reach out to me feeneyj @ amazon if you'd like I can forward you to the right people.