AFAIK at the moment there is no cap. It's pretty much like going long on a crashing market. However, you can later have a bunch of emails and tweets basically begging to be reimbursed and it works most of the time.

Going long will limit your losses to the amount invested. The point is that your AWS bill has no such limit whatsoever.

Yes, going with AWS is a short. You're shorting your own popularity. If your popularity explodes upward, there is no cap on your losses to AWS. The theory is that you are also hedged by your business so the limitless losses to AWS are more than compensated for by even larger gains in your business. But if you're caught with an unhedged short....yikes.

The recommended solution is, ironically for this topic, to have your billing alerts trigger Lambda functions you've written to shut down your infrastructure.