Even if you started up 10,000 Dedicate Instances you would not tie up 10,000 physical machines. A Dedicated Instance won't share hardware with another customer

Even if you started up 10,000 Dedicate Instances you would not tie up 10,000 physical machines. A Dedicated Instance won't share hardware with another customer's VM but it could share hardware with your other VMs. It would probably be beneficial to you if they did, as the post says: "It is important to note that launching a set of instances with dedicated tenancy does not in any way guarantee that they'll share the same hardware (they might, but you have no control over it)."