That's unexpected, at least for me.
They must either be planning to get into games heavily or believe that they can benefit a lot in their other branches by pushing them with this engine for an investment like this to make sense over, say, a normal engine licensing deal.
Ding ding ding
They're most likely vertically integrating, and the flipside of using this free engine is that you are probably locked into Amazon's online server business and services for whenever you use it. My bet is that the catch here is you can make any SINGLEPLAYER game royalty free.
A few MMOs, for example, that use the Cryengine and are therefore clients of Amazon's server business, and the business case solidifies. There was enough of a payback from the vertical integration to make this deal more than worth it.
Plus like they actually just wanted some in house tech because hey why not. Not having to pay Unreal Engine license fees every time you make a game stacks up after a point in time, many of the conglomerates are consolidating their hardware.