Serverless architecture is a cloud computing model where a third-party provider manages the underlying infrastructure, allowing developers to focus on writing and deploying business logic. It utilizes components like Function as a Service (FaaS), event-driven computing, and pay-per-use pricing. The key differences between serverless architecture and traditional infrastructure include the required abstraction level and hands-on management. Serverless architecture runs applications using small functions in an event-driven configuration, making it suitable for real-time messaging, auto-scaling apps, and light data processing. It offers several benefits such as scalability, cost-efficiency, increased developer productivity, and shorter software development cycles. However, there are also challenges to consider, including vendor lock-in, limited execution duration, debugging and monitoring, and cold start latency. Despite these challenges, the future of serverless architecture looks promising with emerging trends such as edge computing, AI and ML integration, and improved developer tools.