How does Craft handle uploading assets to AWS? When users upload assets to a Craft CMS site setup to use AWS, do the assets go directly to AWS or are they uploaded to the Craft server first? 

The reason I ask is I'm building an area where users upload potentially large files from the frontend, and it's quite likely a lot of users will choose to do it at the same time. 

If the files are uploaded to the Craft server first, I might have to spec-up the server a bit more and would welcome any tips for helping Craft handle the multiple large uploads as efficiently as possible.

If the files are simply uploaded to AWS, I take it that means there will be little impact on the Craft server and I won't need to worry about any of this. Is that right?
They are uploaded to Craft first to a temporary file, then Assets uses the Asset Source to work out where to send them next - either the local file system or a remote one.

For handling large uploads in general you could look at this plugin: https://superbig.co/plugins/large-upload