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Simply put, the cloud services that run your applications fall under the category of compute. People often think of compute as just virtual machines running in the cloud, but this is only half the story. Compute may refer to one of two things: IaaS virtual machines, or so-called serverless computing.

 IaaS Compute may refer to an IaaS service that lets you provision virtual machines, storage, and networking resources in the cloud.

 Serverless/FaaS Compute can also refer to what the marketers call serverless computing and what the technophiles call function-as-a-service (FaaS). In this model, the cloud provider hands you a slick interface into which you can upload your own application code written in a variety of programming languages, and the cloud provider executes it on compute infrastructure that they fully manage. This model obviates the need to provision virtual machines. Instead, the cloud provider handles the compute infrastructure, so all you have to do is deal with the application code. FaaS is a type of PaaS offering.

I've never figured out why it's called compute instead of the more familiar computing. My best guess, however, is that it's to distinguish the cloud model from the data center model. The term compute is used almost exclusively of cloud infrastructure.