Serverless Architecture is a cloud computing model that allows developers to build and run applications without managing servers. Instead of provisioning and maintaining physical or virtual servers, developers can focus on writing code while the cloud provider automatically handles the infrastructure. This approach enables automatic scaling, meaning resources are allocated as needed, which can lead to cost savings. In a serverless setup, applications are typically broken down into smaller functions that are executed in response to events, such as user requests or data changes. These functions are hosted on platforms like AWS Lambda or Azure Functions, allowing for quick deployment and efficient resource usage.