Director & Chief Executive Officer at Alphabet
Thank you, Jim, and good afternoon, everyone.
It's clear that after a period of significant acceleration in digital spending during the pandemic, the macroeconomic climate has become more challenging. We continue to have an extraordinary business and provide immensely valuable services for people and our partners. For example, during the World Cup Final on December 18, Google Search saw its highest query per second volume of all time. And beyond our advertising business, we have strong momentum in Cloud, YouTube subscriptions and hardware. However, our revenues this quarter were impacted by pullbacks in advertiser spend and the impact of foreign exchange.
I'll focus on two major things today in a bit more detail, and then I'll give a shorter-than-usual quarterly snapshot from across our business. First, how we unlock the incredible opportunities AI enables for consumers, our partners and for our business; and second, how we focus our investments and make necessary decisions as a company to get there. First, the AI opportunity ahead. AI is the most profound technology we are working on today. Our talented researchers, infrastructure and technology make us extremely well positioned, as AI reaches an inflection point.
More than six years ago, I first spoke about Google being an AI-first company. Since then, we have been a leader in developing AI. In fact, our Transformer's research project and our field-defining paper in 2017, as well as our path-breaking work in diffusion models are now the basis of many of the generative AI applications you're starting to see today. Translating these kinds of technical leaps into products that help billions of people is what our company has always thrived on. Everyone working on the various projects underway is excited. We'll pursue this work boldly, but with a deep sense of responsibility, with our AI principles and the highest standards of information integrity at the core of all our work. We have been preparing for this moment since early last year, and you're going to see a lot from us in the coming few months across three big areas of opportunity; first, large models.
We published extensively about LaMDA and PoN, the industry's largest, most sophisticated model plus extensive work at DeepMind. In the coming weeks and months, we'll make these language models available, starting with LaMDA, so that people can engage directly with them. This will help us continue to get feedback, test, and safely improve them. These models are particularly amazing for composing, constructing, and summarizing. They will become even more useful for people as they provide up-to-date more factual information. And in Search, language models like BERT and MUM have improved searches for four years now, enabling significant ranking improvements and multimodal search like Google Nets. Very soon, people will be able to interact directly with our newest, most powerful language models as a companion to Search in experimental and innovative ways. Stay tuned.
Second, we'll provide new tools and APIs for developers, creators, and partners. This will empower them to innovate and build their own applications and discover new possibilities with AI on top of our language, multimodal, and other AI models. Third, our AI is a powerful enabler for businesses and organizations of all sizes and we have much more to come here. There's a few flavors of this. Google Cloud is making our technological leadership in AI available to customers via our Cloud AI platform, including infrastructure and tools for developers and data scientists like Vertex AI. We also offer specific AI solutions for sectors like manufacturing, life sciences and retail and will continue to roll out more. Work space users benefit from AI-powered features like Smart Canvas for collaboration and Smart Compose for creation.
And we are working to bring large language models to Gmail and Docs. We'll also make available other helpful generative capabilities from coding to design and more. And for our advertising partners, Philipp will discuss in detail how AI is powering dramatic campaign improvements and value-adding features for them. Of course, in addition to all this, AI also continues to improve Google's other products dramatically. And we'll continue our work with others outside Google, including joint research collaborations to develop AI responsibly and to apply AI to tackle society's greatest challenges and opportunities. For example, DeepMind's protein database of all 200 million proteins known to science have now been used by 1 million biologists around the world. We continue to invest in AI across the board, and AI and DeepMind are integral to a bright AI-first future.
Over the past few years, DeepMind has been increasingly working across groups within Google and the other bets and to reflect that progress, we'll be making a financial reporting change that Ruth will share more about in her comments. We are just at the beginning of our AI journey and the best is yet to come. The second thing I wanted to discuss is our sharpened focus. We are committed to investing responsibly with great discipline and defining areas where we can operate more cost effectively. We are focused on methodically building financially sustainable, vibrant growing businesses across Alphabet. For example, we are working to improve the economics and hardware as we focus more intently on the Pixel line and our overall cost structure there. Cloud remains very focused on its path to profitability. And there are many opportunities to build on our progress at YouTube over the years, starting with Shorts monetization.
Overall, I see this as an important journey to reengineer the company's cost base in a durable way. There are several dimensions already underway, including prioritization of our product investments across Google and Other Bets. It also includes a careful focus on our hiring needs, reflecting these priorities, as well as efficiencies in our technical infrastructure and productivity improvements from our AI tools. As part of this, we did a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company and we announced a reduction in our workforce. I'm grateful to Googlers leaving us for all of their contributions and their hard work to help people and businesses everywhere.
Let me give a few quick updates from across the business this quarter. Just this week, we started bringing revenue sharing to YouTube Shorts, which is now averaging over 50 billion daily views, up from the 30 billion I announced on the Q1 2022 call. This will reward creators and help improve the Shorts experience for everyone. Our subscription business continues to grow, with YouTube Music and Premium surpassing 80 million subscribers, including trials. Together with YouTube Primetime channel subscriptions and YouTube TV, we have good momentum here. YouTube's NFL Sunday Ticket will accelerate that by helping to drive subscriptions, bring new viewers to YouTube's paid and ad-supported experiences and create new opportunities for creators.
Turning to hardware. Many outlets and reviewers named Pixel 7 Pro, the phone of the year. Features like Magic Eraser and Photo Unblur are incredible and help differentiate Pixel from others. 2022's Pixel 6A, 7 and 7 Pro are the best-selling generation of phones we have ever launched. And we gained share in every market we operate in this year.
Next, Google Cloud. We see continued momentum with Q4 revenue growing 32%. Our differentiated products and focused go-to-market strategy continue to drive customer momentum, bringing with real-time data analytics and AI. Customers are increasingly choosing BigQuery because we unify data lakes, data warehouses and advanced AI/ML into one system and now analyze over 110 terabytes of data per second. Customers like Kroger can analyze data in multiple clouds without moving data in most cases, and MSCI processes unstructured and structured data at scale.
In infrastructure, our global network and an advanced TPU v4 AI supercomputer helped Snap triple the throughput for its business critical ad ranking workload, while significantly lowering cost. Our machine learning infrastructure with cloud TPU v4 Pods can run large-scale training workloads up to 80% faster than alternatives according to third-party benchmarks, which is helping customers like Bayer accelerate drug discovery. Our reliability advantages and open edge cloud-powered mission-critical 5G network of Telefonica Germany. As I mentioned, our suite of AI/ML solutions across verticals are a key differentiator. We helped Wells Fargo automate the customer service experience for mobile users and HCA continually improve the quality of patient care. In 2022, Mandiant, which we are now integrating, helped over 1,800 customers prepare for or recover from the most critical cybersecurity incidents.
In Workspace, the innovations mentioned earlier are helping drive new wins and expansions across geographies. In Other Bets, from Calico to Weibo, we are focused on investing sustainably across the portfolio and creating good business. Verily, for example, has recently honed its strategy and structure to more clearly focus its product development.
To close, we are all standing on the cusp of an era of amazing opportunities. We are going to be bold, responsible and focused as we move into it. A healthy disregard for the impossible has been core to our company culture from the very beginning. When I look around Google today, I see that same spirit and energy driving our efforts. Thanks to our employees, our partners and people everywhere who use our services. I'm excited for what's next.
Over to you, Philipp.