Choosing the right EC2 instance type can be challenging, especially with over 500 different instances available. To make sense of this complexity, it's essential to identify your application's requirements and choose an instance type that meets them. You should also consider factors such as CPU vs. GPU usage, storage needs, and pricing models like On-Demand, Reserved Instances, Savings Plans, Spot Instances, and Dedicated Hosts. Automation can also help discover better-suited instances by analyzing your workload and providing recommendations for cost optimization. By choosing the right instance type, size, and pricing model, you can optimize your EC2 usage and reduce your cloud costs.