He's probably not renting if from "AWS" but instead from "AWS Ireland" or some subsidiary like that. If the VM is located in us-west-1, AWS Ireland probably then rents the VM from AWS USA for a price designed to minimize profit in the high tax (USA) jurisdiction and maximize it in the low tax jurisdiction (Ireland). This is called transfer pricing.
In theory, that's income to a US Corporation, which is subject to US corporate income tax. In practice, Amazon will find a way to offset that "income" with some tax-deductible claim of loss or investment and pay little or nothing on it. I'm happy to be corrected if I've misunderstood.