"Serverless" doesn't mean there are no servers. It means you don't manage them. You upload code, and the cloud provider runs it only when needed.
Functions sleep until something wakes them up (an HTTP request, a file upload, a database change). You pay $0.00 when they are sleeping.
If your function hasn't run in a while, the provider turns it off. The next request takes a few seconds to "wake up" (boot) the environment.
You are billed for exactly how long your code runs (e.g., 200ms). If your code crashes instantly, you pay almost nothing.
Watch how Serverless handles traffic. Notice how servers appear out of nowhere and disappear when the job is done.
User uploads a photo → Trigger Lambda → Resize thumbnail → Save to S3. Perfect because uploads are unpredictable.
Run a cleanup script every night at 3 AM. Why pay for a server to sit idle for the other 23 hours and 59 minutes?
Ticket sales or voting apps. Traffic goes from 0 to 1 Million in seconds. Serverless handles the burst automatically.