I think they are providing those discounts to promote their own silicon, the Graviton3 chip. You definitely get an execution discount in Lambda for selecting arm versus x86 on that basis.
The rumor is that their own silicon isn't really that much better on perf/watt, but they're discounting it as a multi pronged effort to put pressure on the x86 vendors. If it turns out it's a lot of pressure and it kills x86, then they've commodified their complement. If it's just a threat, then they have a better seat at the negotiating table.