AWS Lambda is the “serverless” gold standard—a service that lets you run code without managing any servers. You only pay for what you use, but if you don’t understand the rules, your bill can grow surprisingly fast.
Here is everything you need to know about Lambda pricing in a clear, simple guide for 2025.
1. The Two Main Costs: Requests and Duration
AWS calculates your bill using two primary factors:
- Requests: You are charged for the total number of times your functions start running.
- Duration: You are charged for the time it takes your code to execute, rounded to the nearest 1 millisecond.
The Free Tier (The Good News)
Every month, AWS gives you 1 million requests and 400,000 GB-seconds of compute time for free. The best part? This free allowance never expires.
2. The “Cold Start” Cost Shift (New for 2025)
A “cold start” happens when Lambda has to set up a new environment to run your code. This used to be a performance problem; now it’s a budget problem.
Important Update: As of August 2025, AWS now bills for the initialization (INIT) phase of a cold start. Before this change, the setup time was mostly free. Now, it’s a recurring budget item, especially for heavy runtimes like Java or C#.
3. Three Simple Ways to Save (Up to 34%)
Tip 1: Switch to ARM (Graviton2)
Most Lambda functions run on x86 processors by default. However, switching to ARM-based Graviton2 processors can offer up to 34% better price-performance and costs roughly 20% less per millisecond.
Tip 2: “Right-Size” Your Memory
When you give your function more memory (RAM), AWS automatically gives it more CPU power.
- Too little memory: Your code runs so slowly that you end up paying more in duration charges.
- Too much memory: You might give your code more CPU than it can actually use.
- Pro Tip: Use tools like AWS Lambda Power Tuning to find the “sweet spot” where speed and cost intersect.
Tip 3: The “Lambda-Less” Approach
The cheapest Lambda is the one you don’t run. Many AWS services—like API Gateway, AppSync, and EventBridge Pipes—can talk directly to databases (DynamoDB) or queues (SQS) without needing a Lambda function in the middle. This eliminates compute costs and reduces latency.
Final Pro-Tip: Don’t Spend Money Waiting
For complex, multi-step workflows that need to “wait” for something to happen, don’t use Lambda to manage the wait. Use AWS Step Functions instead. You don’t pay for the time Step Functions sits idle, whereas a Lambda function would bill you for every second it spends waiting.
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