Amazon EC2, or Elastic Compute Cloud, is a web service that provides resizable compute capacity in the cloud. It allows users to rent virtual servers, known as instances, to run applications and store data. This flexibility means businesses can scale their computing resources up or down based on demand, making it cost-effective and efficient. With Amazon EC2, users can choose from various instance types tailored for different workloads, such as web hosting, data analysis, or machine learning. It also integrates seamlessly with other Amazon Web Services (AWS), enabling users to build and manage complex applications in a secure and reliable environment.