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The physical servers would change ownership and the AWS standard between them would slowly diverge. Same kind of thing as the baby bells.
Do you mean the Bells that have reassembled?
Well yeah but when they were broken up one of the fearmongering things was the physical infrastructure. There’s no reason to believe this would be any different. Just hopefully with less monopoly a couple decades down the line.
This is a little different than a phone company. But you’re right that breaking them up would be the much more sane thing to do rather than shutting them down. It’s not easy to migrate servers, it is easy to change who you’re paying.