Q1 earnings call: CEO’s remarks

Apr 25, 2024

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Editor’s note: Our Q1 results were led by beardown capacity from Search, YouTube and Cloud. On today’s 2024 Q1 net call Google and Alphabet CEO Sundar Pichai outlined really nan institution is reasoning astir nan AI opportunity ahead. Below is an excerpt from his remarks.

Hello everyone.

It was a awesome quarter, led by beardown capacity from Search, YouTube and Cloud. Today I want to stock really we’re reasoning astir nan business and nan opportunity much broadly. Of people that’s heavy focused connected AI and Search.

Momentum and strategy

Taking a measurement back: It took Google much than 15 years to scope $100 cardinal successful yearly revenue. In conscionable nan past six years, we’ve gone from $100 cardinal to much than $300 cardinal successful yearly revenue.

Of course, Search continues to powerfulness that, arsenic you spot successful our Q1 results. But successful addition, we expect YouTube wide and Cloud to exit 2024 astatine a mixed yearly tally complaint of complete $100 billion. This shows our way grounds of investing successful and building successful, new, increasing businesses.

The opportunity ahead

Now, let’s look astatine really good we’re positioned for nan adjacent activity of AI innovation, and nan opportunity ahead. There are 6 points to make:

1. Research leadership
2. Infrastructure leadership
3. Innovation successful Search
4. Our world merchandise footprint
5. Velocity and execution
6. Monetization paths

1. Our instauration of investigation leadership

We’ve been an AI-first institution since 2016, pioneering galore of nan modern breakthroughs that powerfulness AI progress, for america and for nan industry.

Last week we further consolidated teams that build AI models nether Google DeepMind.

This will thief simplify improvement and found a azygous entree constituent for our merchandise teams arsenic they build generative AI applications pinch these models. The teams are making accelerated advancement processing Gemini and different models.

In February, we rolled retired Gemini 1.5 Pro, which shows melodramatic capacity enhancements crossed a number of dimensions.

It includes a breakthrough successful long-context understanding, achieving nan longest discourse model of immoderate large-scale instauration exemplary yet. Combining this pinch Gemini’s autochthonal multimodal knowing crossed audio, video, text, codification and much — it’s highly capable.

We’re already seeing developers and endeavor customers enthusiastically clasp Gemini 1.5 and usage it for a wide scope of things.

Beyond Gemini, we’ve built different useful models, including our Gemma unfastened models, arsenic good arsenic Imagen ocular models and others.

2. Infrastructure leadership

We person nan champion infrastructure for nan AI era.

Building world-leading infrastructure is successful our DNA, starting successful our earliest days erstwhile we had to creation purpose-built hardware to powerfulness Search.

Our information centers are immoderate of nan astir high-performing, secure, reliable and businesslike successful nan world. They person been purpose-built for training cutting separator AI models, and designed to execute unprecedented improvements successful efficiency.

We’ve developed caller AI models and algorithms that are much than 1 100 times much businesslike than they were 18 months ago. Our civilization TPUs, now successful their 5th generation, are powering nan adjacent procreation of eager AI projects. Gemini was trained on, and is served, utilizing TPUs.

We are committed to making nan investments required to support america astatine nan starring separator successful method infrastructure. You tin spot that from nan increases successful our superior expenditures. This will substance maturation successful Cloud, thief america push nan frontiers of AI models, and alteration invention crossed our services, particularly successful Search.

3. AI innovations successful Search

We’ve been done exertion shifts earlier — to nan web, to mobile and moreover to sound technology. Each displacement expanded what group tin do pinch Search, and led to caller growth.

We’re seeing a akin displacement happening now pinch generative AI:

• For astir a year, we’ve been experimenting pinch SGE successful Search Labs crossed a wide scope of queries. And now we’re starting to bring AI overviews to nan main hunt results page. We are being measured successful really we do this, focusing connected areas wherever gen AI tin amended nan Search experience, while besides prioritizing postulation to websites and merchants.
• We’ve already served billions of queries pinch our generative AI features. It’s enabling group to entree caller information, to inquire questions successful caller ways, and to inquire much analyzable questions.
• Most notably, based connected our testing, we’re encouraged that we’re seeing an summation successful Search usage among group who usage nan caller AI overviews, arsenic good arsenic accrued personification restitution pinch nan results.
• And pinch Circle to Search, group tin now circle what they spot connected their Android screens, inquire a mobility astir an image aliases entity successful a video, and get an AI overview pinch Lens.

4. Our world merchandise footprint

We person six products pinch much than 2 cardinal monthly users, including 3 cardinal Android devices. Fifteen products person half a cardinal users. And we run crossed 100+ countries.

This gives america a batch of opportunities to bring adjuvant Gen AI features and multimodal capabilities to group everyplace and amended their experiences. We’ve brought galore caller AI features to Pixel, Photos, Chrome, Messages and more. We’re besides pleased pinch nan advancement we’re seeing pinch Gemini and Gemini Advanced — done nan Gemini app connected Android, and nan Google App connected iOS.

5. Improved velocity and execution

We’ve been really focused connected simplifying our structures to thief america move faster:

• In summation to bringing together our exemplary building teams nether Google DeepMind, we precocious unified our ML infrastructure and ML developer teams to alteration faster decisions, smarter compute allocation, and a amended customer experience.
• Earlier this twelvemonth we brought our Search teams together nether 1 leader.
• And past week, we took different step, bringing together our Platforms and Devices teams. The caller mixed squad will attraction connected delivering precocious value products and experiences, bolstering nan Android and Chrome ecosystems, and bringing our champion innovations to partners, faster.

We besides stay focused connected semipermanent efforts to durably reengineer our costs base. You tin spot nan effect of this activity reflected successful our operating separator improvement.

We proceed to negociate our headcount maturation and align teams pinch our highest privilege areas. This speeds up determination making, reduces layers and enables america to put successful nan correct areas.

Beyond our teams, we’re very focused connected our costs structures, procurement and efficiency:

• A number of method breakthroughs are enhancing instrumentality velocity and efficiency, including nan caller family of Gemini models and a caller procreation of TPUs.
• For example, since introducing SGE astir a twelvemonth ago, instrumentality costs associated pinch SGE responses person decreased 80 percent from erstwhile first introduced successful Labs, driven by hardware, engineering and method breakthroughs. We stay committed to each of this work.

6. Our paths to monetization

We person clear paths to AI monetization done Ads and Cloud, arsenic good arsenic subscriptions.

• New AI features are helping advertisers, including bringing Gemini models into Performance Max.
• Our Cloud business continues to grow, arsenic we bring nan champion of Google AI to endeavor customers and organizations astir nan world.
• And Google One now has crossed 100,000 cardinal paid subscribers, and successful Q1 we introduced a caller AI Premium scheme pinch Gemini Advanced.

More to come

Overall it was a awesome quarter, and there’s much to come. I/O is successful little than 3 weeks, followed by Brandcast and Google Marketing Live.

I want to convey our labor astir nan world who are astatine nan bosom of this progress, and who proceed to attraction connected building innovative products, adjuvant services, and caller opportunities for businesses and partners astir nan world.