[kalleboo]

Amazon are also well-known for running things at a loss for years while an idea gets entrenched. It could be that they're prepared to eat a loss for a couple of generations just to popularize the idea of cloud-based HPC.

They might not run their hardware at a profitable capacity right now, but in 3-4 years when some labs are looking at replacing/updating their current systems, they will look at Amazon as an solid alternative and then things will turn up. And until then they can't half-ass it with too low capacity because when labs do some trial projects, if they come back with a "sorry we're out of instances" error, they'll decide they can't trust Amazon.