[starfallg]

It's not really that much magic. It's just a variation of EVPN-VXLAN plus smart NICs that segments and directs the traffic. Then they have normal VM hosts or nowadays devices with ASICs that handle the GW and NAT functionality.

[sofixa]

Custom ASICs (Nitro chips) aren't magic? Maybe so, but they cost money to develop.

All of the other networking stuff ( Security Groups, NACLs, flow logs, VPCs, subnets, etc.) you don't directly pay for, isn't magic either, but also cost money.

[starfallg]

Nitro is just a fancy converged host adapter with Smart NIC functionality. It's unclear to the industry how much of Nitro is custom, and how much of it is existing IP that is cobbled together (e.g. Graviton and the ARM Neoverse cores).

The ASICs are on the fabric doing the routing and NAT for all the traffic in the AZ. These ASIC are unlikely to be custom. Hyperscale operators typically use open networking hardware with merchant silicon. You can get open networking hardware to do all sorts of packet manipulation, and these devices are a cheaper than traditional manufacturers, but more powerful as they expose more low-level interfaces.

All those features you talk about are implemented from features that are provided by these hardware platforms.

AWS is just putting an managed service together from them, no different to how they take postgres, do some tweaks and rebrand it as an AWS service.