I have two. The first one around AI and the cost of AI. I appreciate all the color about all the AI tools that are to come. I guess, first question is, how should we think about the potential impact on CapEx, and the higher compute intensity of these AI tools potentially impacting margins over the next couple of years? And then the second one, Ruth, I really appreciate the conversation about long-term efforts underway to improve efficiency. How should we think about potential impacts of those efforts in '23 and '24? Ruth Porat (CFO): Thanks for the question. Starting on your question about AI and CapEx. As I think Sundar and Philipp both noted, AI is already incorporated in many of our products, products like Performance Max and Smart Bidding, and Cloud, as Sundar said. It is more compute-intensive but also opens up many more services and products for our users, for creators, and for advertisers. That being said, we're very focused on further optimizing the cost of compute, and that's across all elements: data center, servers, and our supply chain. So we're continuing to invest with a keen lens on the return on that capital. Regarding overall efficiency opportunities, we have a very keen focus on the three areas that I noted, and one of the key elements of it is using AI and automation to improve productivity and efficiency of our technical infrastructure. These work streams that we have in flight take longer to implement, execute, and continue to provide added upside as we go through time, which is why I indicated you would see more of an impact in 2024 than in 2023. But we're continuing to work through them.

I have two. For Sundar and Philipp, you both mentioned the NFL in your remarks and the opportunities it opens up. Can you comment and help us define what do you see as that longer-term opportunity? And then just, Philipp, you've said in the past about scaling monetization on YouTube Shorts. What are the sticky factors? What's taking time to really bring advertisers on? And what are some of the things you've seen in terms that you've solved to make this a more quickly monetizable product? Philipp Schindler (CRO): Yes. Thank you so much for the question. We think there are a lot of great opportunities to differentiate the user and creator experience with our unique capabilities. It means that every YouTube viewer who is interested in the NFL can now have one-click access to the full offering of Sunday Ticket as a add-on package on YouTube TV subscription and as a stand-alone offering on Primetime Channels. This will be the first time that Sunday Ticket is actually available a la carte for fans. On YouTube TV, we're building the ability for subscribers to watch multiple screens at once. And on YouTube CTV, we'll be adding new features specific to the Sunday Ticket experience like comments, chats, polls, and so on. On the creator side, imagine all the innovative ways they can create with exclusive NFL content, behind-the-scenes event access, and so on. Closing the gap between Shorts and long-form content is a big priority for us, as is, of course, continuing to build a great creator and user experience, which we're paying a lot of attention to. As on Shorts are now available, it gives you a bit of a sign for the progress. We brought revenue sharing to Shorts via our YouTube Partner Program. Ultimately, our goal is to make YouTube the best place for Shorts and creators.

One for Sundar and one for Ruth. For Sundar, can you just talk more about how you can bring the AI products to market with the principles and integrity that you talked about, and how you can do that without sacrificing quality or trust? And then, Ruth, can you help us quantify how you're thinking about these efforts? Sundar Pichai (CEO): Thanks, Doug. On the AI side, it is a really exciting time. I think we've been investing for a while, and it's clear that the market is ready. Consumers are interested in trying out new experiences. I feel comfortable with the investments we have made in making sure we develop AI responsibly. We'll be careful. We'll be launching more lab products in certain cases, beta features in certain cases, and just slowly scaling up from there. We see this as a chance to rethink, reimagine, and drive Search to solve more use cases for our users as well. So again, early days, you will see us be bold, put things out, get feedback, and iterate and make things better. Ruth Porat (CFO): On your second question regarding Other Bets investment levels, our goal for Other Bets is to use our deep technology investments to drive innovation with the potential for value creation. At the same time, we focus on the pace of investment and financial returns. We're analyzing opportunities for monetization and commercialization. There is no monolithic approach across the portfolio, but we ensure that investment supports products and services within Google or for Alphabet broadly. DeepMind's research is core to our future across the product areas in the Alphabet portfolio. This reporting change reflects the strategic focus in DeepMind, which is why I indicated that beginning Q1, DeepMind financials will be reported within our corporate cost segment.

Just digging into Search kind of low single-digit growth excluding FX. Can you talk about the pressures there, volume versus pricing or CPCs? What's really driving the slowdown? Just think about that. And then any signs that we're near a bottom? Any stabilization in growth rates you can talk about or how your outlook is for '23 on that? Ruth Porat (CFO): Overall, as we've indicated, we remain very excited about all that we're doing in Search, and so that's why you've heard so many comments about the application of AI and what that means for the ongoing opportunity. You had a number of different questions in there. I think one was on volumes. In the 10-K that we'll be filing shortly, you'll see that for the full year 2022, CPCs were down 1% versus last year. Clicks were up 10% in 2022, reflecting several factors, including increased engagement primarily on mobile devices and improvements in ad formats. But overall, we're really excited about what we see ahead. We're not going to predict the global environment, but we're very focused on what we can control. The innovation to help advertisers overall and our cost reengineering will drive long-term sustainable value creation.

Just a question on the hardware business. Pixel's doing quite well, but it seems like there have been issues around other areas with this inventory write-down. So could you just talk about the strategic importance of having the wide range of hardware products that you have in that segment as it relates to your overall AI initiatives? Sundar Pichai (CEO): Thanks, Ross. First of all, I'm very pleased with how Pixel has performed through a challenging macro environment. Our computing portfolio is incredibly important. It allows us to invest and drive innovation forward. You have to put it all together as a product and ship it. The ecosystem helps guide the overall usage. So we are very thoughtful about how we are approaching this area, and we continue to focus on improving all of this in a durable way.

I'll just ask one question on, Ruth, you mentioned a couple of times getting Google Cloud to profitability. Can you just talk through how that gets done? You had almost 40% growth in Google Cloud. The operating loss level stayed about the same from '21 to '22, so the growth is there. What are the factors that need to be solved in order to get nice profitability out of that segment? Ruth Porat (CFO): With Google Cloud, we've been investing ahead of our revenues, given the growth and the opportunity overall. There have been meaningful investments to ensure that we're equipped to support customers across segments around the globe. While we remain focused on the path to profitability, every element is relevant here for Cloud as well, everything from our efficiency with our technical infrastructure to our efforts that are driving these financial outcomes. We're closing the gap to profitability but still working through the investments for growth.

Ruth, can you give us a sense of what you're seeing in Q1? Is this year a little more seasonal than historic? Are you observing any different patterns just over one month into the year? Can you give us any color in terms of how you're framing this quarter? Ruth Porat (CFO): As you know well, we don't provide exit run rates. What we try to do is give you context within which we're approaching the overall business and the priorities that we have as we're looking at revenue upside and growth levers as well as how to reengineer our expense base to deliver attractive returns. So not really much to add to the comments that you've heard today; we're continuing to execute across each of the elements discussed. James Friedland (Head of Investor Relations): Thanks, everyone, for joining us today. We look forward to speaking with you again on our first quarter 2023 call. Thank you, and have a good evening.