In previous companies I've seen AWS and Azure do the same for >$10k bills from small startups. 1x$10,000 invoice is no where near as much as a lifetime of hosting a unicorn startup. Most cloud providers will even give you $50k to $100k in credits for 1 year if you are a startup from a good incubator/investor. It gives you incentives to not to care about how much you're spending. By the 1 year mark you're probably making some money, raising another series, and attempting to dramatically scale up your business so now you don't have the time to clean up the tech debt you've created to lower costs. They are absolutely making a bunch of money this way.
What other kinds of businesses or services let you run up a bill of tens of thousands of dollars and then say, "Ok, you made a mistake, you can take it back"?
Any educated guesses on what this compute might actually cost Google?
I assume they're able to do this because the fixed costs have mostly been paid for already and the marginal cost of the electricity, system wear, and bandwidth are negligible, but I'm not sure.
It would cost them dollars. An IPhone costs < $100 to make. Obviously there's a development cost to it all. it's also easy to suggest that there's probably a feature missing atm :D
I had an € 1.200 bill from Google once for using their reverse geolocation API for a month. I complained and got a canned response saying something like "Fine, here's your money back but next time you're paying". It probably helped that I had been on the free tier up until then and complained that I never got a warning that I had surpassed the free tier amount of API calls.
Cloud providers somehow turned a commodity business into a high margin business. The costs are way lower than you think. The other factor is that keeping customers means more profit than throwing them out, even if they have made a mistake.