Innovation? Probably not much. Running on cloud infrastructure is hardly innovative in 2020, there are several other viable choices apart from AWS, and of course before cloud people were running systems in data centres for a long time.

In short, infrastructure like AWS might make some things easier, but it doesn't create much potential to do anything radically different. Big businesses consolidate.

Is the annual revenue of all YC companies combined larger than Amazon?

I don't think we can tell, because a lot of YC companies are private and don't necessarily publish their figures. Amazon's reported revenue rate is in the region of $300B. YC has a portfolio that includes unicorns like Stripe and DropBox, but also a long tail with many less successful or now-failed businesses.

It seems unlikely that the YC portfolio out-earns Amazon, but this isn't really a useful comparison. For one thing, my figures before were only looking at the tech side of Amazon, and completely ignored major factors like Amazon's huge retail operation and most of its acquisitions over the years. For another, it would be no surprise for the big business with huge volumes to bring in more revenue. Small businesses innovate, and innovation is often more about potential revenues in the future than actual revenues right now. Big businesses consolidate, and consolidation is all about scaling up once they've found something that works.