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To my understanding the AMI contains all the files of the system, including compiled kernel.

When you create an AMI from a snapshot you can specify the kernel ID (ex aki-*). Why then do you need to specify the kernel ID when launching an instance from an AMI that already has the Kernel ID specified?

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Amazon uses Xen paravirtualization which requires a kernel to be supplied as part of the config. Xen uses the kernel in a very different way than say VMWare or KVM. It allows, among other things, for a hypervisor to run efficiently without CPU virtualization extensions.

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