How to: How does the default Kubernetes AWS networking work?
In addition to regular EC2 ip addresses, Kubernetes creates its own cluster internal network. In AWS, each instance in a kubernetes cluster hosts a small subnet(by default a /24), and each pod on that host get its own IP addresses within that node's /24 address space. Whenever a cluster node is added or deleted, the Kubernetes controller updates the route table so that all nodes in the VPC can route pod IPs directly to that node's subnet.