AWS IAM is designed to handle access to AWS resources. You can create new users, but the basic authentication that EC2 instances receive is through key pairs that do not match IAM users.
Perhaps you can create your own system that manages IAM users, and also generates a private and public key for their use inside the created instances (maybe even reusing the keys that you get when creating a new user in IAM).
In general, this does not really mean that we will use this path, as I understand it.
Eran sandler
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