C is correct because the root cause is synchronous chaining of Lambda functions that causes the initial function to wait and time out. AWS Step Functions is designed to orchestrate multiple steps (including Lambda invocations) with managed state, retries, and timeouts at the workflow level. By moving the chaining logic into a Step Functions state machine and removing direct function-to-function invocations, the initial Lambda no longer needs to remain running while waiting for downstream functions. Step Functions can coordinate the sequence (or parallel branches), handle transient failures with retries/backoff, and maintain execution state without requiring a long-lived “waiting” Lambda invocation. This resolves timeouts while preserving the operational and cost advantages of a serverless Lambda-based architecture and typically requires minimal code change compared to rewriting or migrating platforms.

Why the other options are incorrect:

A: Migrating to containers/EKS is a major architectural change and increases operational overhead, violating “minimum application changes” and the desire to keep Lambda benefits.

B: Rewriting in Java is extensive and unnecessary. Adding SQS between functions changes invocation style and error handling and still requires significant redesign (and does not inherently solve orchestration/branching as cleanly as Step Functions).

D: Grouping functions into containers and running on ECS Spot changes the compute model and introduces more operational overhead and larger application changes than adopting Step Functions.