How does the compute instance works?

  1. Bare metal servers hosts Host Kernel
  2. Host Kernel holds the Host OS
  3. Host OS provides the Hipervisor
  4. Hipervisor allows Guest OS's to run

The hipervisor is a virtualization management software that allows virtual machines to run in the same physical space, without sharing data.

You actually endup sharing the Host OS with other users with their EC2 instances.

Links to: EC2