In terms of the challenges, I think making sure, I think we are constantly, I think it’s been a mindset shift which we’ve been driving across the company to make sure that we are embracing this opportunity, but being very efficient in how we are approaching it, making sure we are redirecting our people to the highest priorities across the company, building on our 20 years of experience and driving machine efficiencies year-on-year so that we can put our dollars to work as efficiently as possible. So making sure, balancing all of that, moving forward in a very bold and responsible way at the same time, those are the important things to get right from my perspective.
Operator: Our next question comes from Stephen Ju with UBS.
Stephen Ju: All right, thank you so much. So hi, Philip. I think it’s approaching the two-year anniversary for the launch of ads on YouTube Shorts. And I think you’ve given us an update on monetization pickup sequentially. But with that in mind, I think YouTube has launched an array of ad products and automation tools to help advertisers transfer what they’re doing to the vertical screen. So how is this translating into buy-in among your advertiser clients? And secondly, based on what you’ve seen over the last two years, are there any structural reasons that you can cite as to why the monetization cannot match what is already the case on the horizontal screen? Thanks.
Philipp Schindler: Yes, look, this is a great question. First of all, I mean, it started with the fact that YouTube performance was very strong in this quarter. And on Shorts, specifically in the US, I mentioned how the monetization rate of Shorts relative to in-stream viewing has more than doubled in the last 12 months. I think that’s what you were referring to. And yes, we’re obviously very happy with this development. The way to think about it is advertisers really only spend with us when they see a positive ROI. So you can assume that this wouldn’t be happening unless it were to work for advertisers in the short term and also in the long term. That’s an important part, I think. Overall, Shorts is a long-term bet for the business.
It has really helped us respond to both creator and viewer demand for short-form video. We talked about the strong growth, averaging 70 billion daily views. I mentioned the number of channels uploading has increased 50% year-over-year. So again, I’m very happy with this development. And to your question, structural reasons whether we can’t get to a match here, I have a hard time seeing those at the moment over time.
Operator: Our next question comes from Justin Post with Bank of America.
Justin Post : Hey. Thank you. I’m going to ask another one about CapEx. It seems to be your biggest investment area. Just first, you saw the big uptick the last two quarters, but you’ve been investing in AI for years. Is the uptick because supply is getting easier to get, or do you see more opportunities with the available supply to really fuel AI? So, has the GPUs and everything gotten better that you feel more investing more? And then thinking about the returns both for advertising and cloud on the CapEx, do you feel like this is a higher cost of doing business, or do you think this is an opportunity to even get better returns on your capital spend than you’ve had in the past? Thank you.
Ruth Porat: So, the increase in CapEx, as Sundar said and I said, really reflects the opportunity we continue to see across the company. It starts with all that we’re doing in support of the foundation, all the Gemini foundation model, but then also, clearly, the work across Cloud, on behalf of Cloud customers and the growth that we’re seeing with GCP and the infrastructure work there, and then, of course, as both Sundar and Philip talked about, the application across Search, YouTube, and more broadly the services that we’re able to offer. So it’s the growing application and our focus on ensuring that we have the compute capacity to deliver in support of the services and opportunities we see across Alphabet. And it really goes to the second part of your question, which is that as we’re investing in CapEx and applying it across our various businesses, it opens up more service and products which bring revenue opportunities, and we’re very focused on the monetization opportunity.
It does underlie everything that we’re doing in Google Services and Google Cloud. And as Sundar noted, we’re at the same time very focused on the efficiency of all elements of delivering that compute capacity from hardware, software, and beyond.
Operator: Our next question comes from Mark Mahaney with Evercore.
Jing Lee: Great. Thank you. This is Jing Lee for Mark Mahaney. A couple of questions. One, just maybe an expansion on the Search query questions from before. More like Search volume, maybe in the context of the off Google environment, like AI chatbot, for example, we’ve seen kind of meta AI directing to Google search results. Do you think there’s actually a scenario where like AI system can create a step function change in search volume or use cases off Google? Do you think there’s more color on what are you seeing right now or what are you expecting to see in that area? And then the second question on just the comment of YouTube and Cloud exiting at $100 billion run rate. What is informing this outlook of visibility for you? If you can talk about, is it driven by any sort of Cloud demand inflection or step change in the Gemini workload demand? If you can flush it out a little bit, thanks a lot.
Sundar Pichai: On your first question, look, I said this before, but to be clear, we view this moment as a positive moment for Search, and I think it allows us to evolve our product in a profound way, and Search is a unique experience. People come and they get to, be it if you want answers, if you want to explore more, if you want to get perspectives from across the web, and to be able to do it across the breadth and depth of everything they are looking for, and the innovation you would need to keep that up. I think it’s what we’ve been building on for a long time, and so I feel we are extraordinarily well set up, particularly given the innovation path we are on, and overall, I view this moment as a positive moment. So that’s how I would say it, on the second part, Ruth.
Ruth Porat: I’m sorry, what was the, I think the –
Sundar Pichai: The YouTube and cloud.
Jing Lee: Yes, like in terms of your comment about $100 billion exit rates for YouTube and Cloud, what’s driving this visibility for you, and any kind of inflection you’re seeing in the cloud demand?
