Karpenter is a Kubernetes autoscaler designed to replace the cluster autoscaler. Instead of managing static node groups and scaling them up/down, Karpenter dynamically provisions compute resources on-demand based on pod requirements. It observes pending pods, picks the most cost-effective instance type and size, launches it, and schedules pods. It also consolidates underutilized nodes (drains pods, terminates node) and automatically shifts workloads to cheaper spot instances with graceful fallback to on-demand. Karpenter is AWS-native (works with EC2) but philosophically designed to support multiple cloud providers through abstractions.