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First, we just announced a new scaling behavior for Lambda: Each function now starts with a limit of 1000 and gets an additional 1000 every 10 seconds.
Saying that, it will not solve your issue, as you still need 25K at the same time. What you need to do is catch the throttling errors in the state machine and retry. Alternatively, if your use case allows this, you cam invoke your functions asynchronously (only if your state machine does not need the functions' response).
Regarding Provisioned Concurrency, as you said, it will be costly, but if you know when you will need it, you can enable it before, let the state machine run, and then disable it. But, it will take longer the overall process.
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Thank you. I will learn about these two alternatives.