Not necessarily "failure": for a startup, it makes sense to prioritize speed of development over cost optimization. Since you don't know just how fast your MVP will grow, remaining elastic early on is a plus, and sticking with hyperscalers gives you that (you never know, you may land on the front page of Slashdow and HN at the same time..).

For solo indie developers, in contrast, it makes more sense to seek out the cost optimal setup straight away.

I totally get the tradeoffs, but that's not what I'm talking about. For example the popular Hey article was 10 years into their operations and they were spending multiple millions with AWS. That's not a startup anymore, and they don't need to optimise for unexpected 10x growth. At some point for new companies it transforms from "good decision" to "total cost is comparable" to "we should notice cloud doesn't make sense now" to "we're years late and failed at planning".

99% of all “startups” will never grow past the need of one VM and one database - that includes all of the dumb “AI startups” that YC is funding.