When you have big contracts like that, you get significantly discounted rates. And when you need large amounts of compute like that, you do need a whole bunch

When you have big contracts like that, you get significantly discounted rates. And when you need large amounts of compute like that, you do need a whole bunch of staff to manage it and make it efficient and start reproducing / maintaining similar software created by the cloud providers. Let's say AWS makes a %50 profit margin over the raw cost of the hardware than you doing it yourself in DC, and each engineer is $400k/yr. You need to keep under 100 engineers to just start beating AWS, and your not in the business of running cloud infra. Also when you run the DCs yourself, usually it's much slower for other engineers using your DC infra than using AWS or similar. It gets complicated!