Having worked on infrastructure deployed this way, I can say this oversimplifies a bit. There's virtually never no spot capacity at all, there's no capacity at a given bid price, for a given instance type, in a given region. You can start to scale up on-demand infrastructure using spot price as a signal, before there's literally none left, and you can also run on clusters of heterogeneous instances, and change your instance type mix when one instance type's price goes up. In the worst case you can fail out of a particular region whose spot prices have gotten too high. Lots of options.