This would only make sense if Intel and AMD are still the dominant platform for Amazon. But in reality nearly 50% of all new EC2 instances built on are Graviton, and they are only limited by TSMC capacity. ( Or more like Amazon inability to predict the Graviton demand ) in another year or two this could close down to 70-80%. Last time I heard this pace is two years ahead of their internal estimate and schedule. And most of these deals were signed years before, i.e Amazon are still enjoying discounts while producing Graviton. So I dont think discount from Intel and AMD factor much into those decisions. If Intel no longer give discount AWS just purchase more from AMD. Amazon has all the cards in these deals. Not Intel or AMD.
The paranoid might suggest it is coming from Intel's PR team, who might want AWS customers to believe that the savings might not be sustainable.
I assume you mean cost / performance as in Cost to amazon and not price as in price paid by consumers? Because Graviton is both faster and cheaper per vCPU. ( Amazon unit for a single thread )
>AWS taking a short term margin hit
It is hard because even if you can reliably extrapolate the cost of Graviton chip by wafer price. You will never know how they put the R&D into accounting. Do you have NRE cost in every single one those chips? ( which is what most people assume but not necessarily true ) Or do you move the whole R&D of Graviton into whole AWS R&D budget? And then you will have to calculate the power usage per workload to work out the power saving which gives you the TCO. Since 30%+ of Operating cost are going to energy usage. Being power efficient is also extremely important at the scale of AWS.
All in all I do not believe that Amazon is takin a short term margin hit ( and I dont understand where this narrative came from ), it is cheaper to produce, it uses less energy, and Amazon is pricing it as such, slightly cheaper than Intel and AMD's counterpart. Just like they did with the first generation of ARM. Graviton actually being faster per core just happens to be a bonus.
One has to remember. Moving to ARM / Graviton instances isn't free. You have to do your own testing and benchmarks to make sure it is indeed faster for your Apps. And that isn't always the case. You also have to make sure every part of your stack compile and works 100% on ARM. It just happens the cost saving is so gigantic lots of companies are spending time to move, which create a positive feedback loop in both open source and proprietary software to move towards ARM.