Hi,
EC2 is Amazon Elastic Compute Cloud (Amazon EC2) on Amazon Web Services (AWS) Cloud that provides scalable compute. It provides Virtual computing environments, known as instances and the various features are listed here: https://docs.aws.amazon.com/AWSEC2/latest/UserGuide/concepts.html. So the word instance here is a virtual compute environment/capacity and not a traditional VM with nested virtualization.
Now, when a user launches a bare metal instance, Amazon EC2 provisions a physical server with the specified configuration and installs the operating system and any required drivers. With bare metal, you get direct access to the hardware and access to virtually 100 percent of the hardware’s resources without any major overhead. On the availability of Bare Metal Instances, EC2 offers a variety of instance types (624+) that customers can choose from based on their use cases, and bare metal is one among them. https://aws.amazon.com/ec2/instance-types/. Not all of the EC2 instance families and instance types will have bare metal variant/equivalent, it appears on the instance families with a specific set of CPU/Memory/network combination that suits the customers requirement. Question on how AWS meets demands, it's done through the global infrastructure https://aws.amazon.com/about-aws/global-infrastructure/ and AWS ensures the customers needs are met in this case.
Hope this helps Thanks, Arun
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