The paradox is that if the coworking space were the cloud, it would just grow with you, and easily house a 50k-strong company, while you'd be paying the same (high) rate per employee.

Why would this happen? Because what the company builds is a large and growing money-making contraption right inside the coworking space, also using parts of the building for critical functions, and the door is intentionally kept small. The only way to move that contraption is to dismantle it and reassamble in a much cheaper, purpose-built hangar, rebuilding some of the critical parts along the way. During all that time, the contraption would stop making money.

That's the beauty of AWS business model: it's a no-brainer for a startup to use it, but the startup grows, more financially efficient infrastructure options become unattainable because of the very high cost of the move. This is the best-executed vendor lock-in I know.