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If Amazon reduces costs behind the scenes, they can maintain the same revenue while lowering prices for everyone, by helping people deploy previously cost-prohibitive infrastructure.

(ie, if people now use 1.5x as many Lambdas, they can lower costs by 1/3, and everyone wins).

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The Jevons paradox applies to compute. In economics, the Jevons paradox occurs when technological progress increases the efficiency with which a resource is used, but the rate of consumption of that resource rises due to increasing demand. The more efficient (or cheaper) compute gets the more uses we find for it, rising the consumption of it.

People think about pricing as a zero sum game. In reality, there are very few things in the world that are zero sum games.

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