How does Amazon Machine Image (AMI)?

AWS AMI stands for Amazon Machine Image. As its name suggests, it is a image for machine. By Image, it means a blueprint. Using AMI, you can create machines of that type. AMI can contain hardware and software configuration information(not the actual, just information) which will be used by machines created using that AMI.

You can use the available AMIs which are already provided or you can create a custom AMI from a running instance and launch more instances with the same configuration. You can also purchase some AMIs, sell your own AMIs too. If you are finished with your AMI, you can deregister it, which will delete the snapshot (storage) associated with it.