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How does EC2 Nitro System architecture improve performance, security, and efficiency compared to older EC2 hypervisor based virtualization?

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Answer

The Nitro System offloads much of the virtualization overhead, such as networking and storage processing, from the main host CPU onto dedicated Nitro hardware components, delivering performance that is nearly identical to running directly on bare metal hardware, while also improving security by using a Nitro Security Chip that enforces strict isolation between the underlying hardware and customer instances, preventing even AWS operators from having direct access to customer instance memory or data.
aws ec2 describe-instance-types --filters Name=hypervisor,Values=nitro
Real-world example A financial services company running latency sensitive trading applications benefits from the near bare metal performance and enhanced security isolation provided by Nitro based EC2 instances, compared to the older generation hypervisor architecture their previous infrastructure used.

Common follow-ups: What specific security guarantees does the Nitro Security Chip provide?;Are all current generation EC2 instance types built on the Nitro System?