Business 101 teaches us that pricing isn't based on cost. Call it top down vs bottom up pricing, but the first principles "it costs me $X to make a widget, so 1.y * $X = sell the product for $Y is not how pricing works in practice.
The price is what the customer will pay, regardless of your costs.
Which it won't be, if at every turn you choose the hyperscaler.
For example I calculated the cost of a solar install to be approximately: Material + Labour + Generous overhead + Very tidy profit = 10,000€
In practice I keep getting offers for ~14,000€, which will be reduced to 10,000€ with a government subsidy and my request for an itemized invoice is always met with radio silence.
It kinda is, but obscured by GP's formula.
More simply; if it costs you $X to produce a product and the market is willing to pay $Y (which has no relation to $X), why would you price it as a function of $X?
If it costs me $10 to make a widget and the market is happy to pay $100, why would I base my pricing on $10 * 1.$MARGIN?
But that is an equilibrium result, and famously does not apply to monopolies, where elasticity of substitution will determine the premium over the rental rate of capital.