AWS Spot Instances refer to unused computing capacity of the systems which are sold to the customers on very lower rates as compared to other AWS instances.
AWS Spot Instances are bought through bidding process. Customer bids for an unused computing capacity and when the both parties i.e. supplier and buyer agree upon a bidding rate then the computing capacity is assigned to the client. if the spot price increases from the bidding price after issuing the instance to the customer, then the contract gets terminated and supplier cuts off the instance supply to the customer until and unless customer pays the new increased price to the supplier.
AWS Spot Instances are basically used to benefit both supplier and customer. it utilizes the unused computing capacity of the Amazon web services henec benefiting the supplier and on the other hand it provides a lo cost solution for the businesses with less critical needs. However, AWS Spot Instances are not feasible for critical and real time systems.