The speed of light limits fibre speed which in turn limits high-frequency trading.

Flash Boys by Michael Lewis was a fun read on the subject. One memorable quote alleged that HFT traders would "sell their grandmothers for a microsecond [of edge]"

The issue is the speed of light.

for an interesting reversal of the "problem" of the speed of light, IEX is a stock exchange design to combat HFT by adding a physical speed bump by way of 38 miles of fiber optic cable. The general idea being to level the playing field and improve market liquidity using physical communication limits of light. https://en.wikipedia.org/wiki/IEX

That marketing gimic adds hundreds of microseconds to order latency. It’s not designed to level any playing fields it’s designed to get publicity.

Not really because anyone running a trading strategy that needs to worry about latency is already running their servers in the same datacenter as the exchange, so that just moves with it. What probably is an issue is that the datacenters required for a market don't look like AWS datacenters. I don't have any direct experience here, but I would be shocked if HFT software is something you could just deploy to a standard VM like on AWS.

They'd probably be running in an Equinix facility instead of AWS.