Feature Overview (aka. Goal Summary)  

This Feature depends on the work done in upstream to create a CAPI provider for Karpenter .

Goals (aka. expected user outcomes)

1.  Tuning upstream PoC karpenter-provider-cluster-api for azure experience
   1. ensuring that metadata from azure services is present on capi objects
   2. closing feature gap with karpenter-provider-aro around pricing data
2.  Write end-to-end tests for karpenter-provider-cluster-api running OCP on Azure
3.  Create an enhancement document for the upstream CAPI provider for Karpenter
   1. this will require some consensus from community
   2. once enhancement is accepted, we can pivot from PoC version to released version (alpha/beta)
4. Integrate with CAPI KArpenter-provider developed as part of OCPSTRAT-943

Out of Scope

Creating a multi-provider cost/pricing operator compatible with CAPI is beyond the scope of this Feature. That may take more time.

Background 

Karpenter.sh is an open-source node provisioning project built for Kubernetes. It is designed to simplify Kubernetes infrastructure by automatically launching and terminating nodes based on the needs of your workloads. Karpenter can help you to reduce costs, improve performance, and simplify operations.

Karpenter works by observing the unscheduled pods in your cluster and launching new nodes to accommodate them. Karpenter can also terminate nodes that are no longer needed, which can help you save money on infrastructure costs.
Karpenter architecture has a Karpenter-core and Karpenter-provider as components. 
https://github.com/Azure/karpenter-provider-azure