The 'edge' refers to data centers that live outside of an Availability Zone (AZ), where Edge Functions run on these data centers. These Edge Functions can handle requests for users in different regions, reducing latency and improving performance by serving content closer to the user. They have lower CPU time limits compared to standard serverless functions and are better suited for handling frequent requests such as authenticating users or A/B split testing. By transitioning server-side rendered pages to static ones using Edge Functions, sites can improve performance, reduce costs, and simplify their architecture.