As an ex aws senior leader many products in aws operate at a loss when the underlying infrastructure becomes more expensive for some reason. Glacier is a great example of this, they ran at a steep loss as they mis-bet that hard drive prices would drop faster than tape storage and had to retire their original architecture and redevelop a tape infrastructure. It would have been totally reasonable to increase prices then decrease them once the new platform was available, but they chose instead to operate at a loss and not adjust prices. I believe they actually decreased prices once the tape infra was up.

That said margin is why they could do this. Aws as an overall portfolio of services is profitable enough that they can loss lead on many products that operate at a loss for many reasons.

Finally pricing is done with margins enough to later lower prices, mostly done to ensure they don’t end up in a permanent loss leader situation by misjudging margin or some other aspect prior to launch. But at least when Andy Jassy was in charge there never would have been a price increase - ever. We all knew down was the only thing he would consider, and lowing prices was a good way to get promoted.

That's fine, because as a business I can decide whether or not that price is acceptable to me.

On the other hand, if they are known to occasionally significantly increase the price of their offering, then I have to factor that risk into my budget (let's face it: most businesses are locked in to their current cloud provider to a significant extent) so the price on the label is misleading.

I much prefer to pay a bit more up front than to have to constantly guesstimate how much financial risk is introduced by my cloud provider's erratic business decisions.

Agreed, but in that case every AWS offering should always be more expensive, right? Is that the case?

This is not my experience with AWS, not at all. AWS deserves huge praise for this.