This is my kitchen table and also my filing system. Over much of the past three decades, I've been an investor the highest calling of mankind I've often thought was private equity. And then I started interviewing. Well, I watch your interviews because I
know how to do something. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said to 50. I said, Fine. I didn't negotiate with him. I didn't know due diligence. I have something I'd like to sell and how they stay there.
You don't feel inadequate now because being only the second wealthiest man in the world, is that right? Over the past quarter century, one of the most significant companies in the world has been Google. It is led today not by its founders, but by a person who started in 2004, rose up the ranks and is now the CEO. His name is Sundar Pichai. I sat down with him recently and the Google offices in New York to talk about the future of Google and also importance of artificial intelligence to the company. When you joined Google, the alphabet hadn't yet existed. It was 2004. The company, which started in 1998, I believe. So how big was the company in 2004? 2004 we were about just over a thousand people, I think. But we were growing pretty fast.
Yeah, we were about a thousand people. So when you why did you come to the company Enthusiasm for who attracted you to come here? Small little search engine company. Search wasn't that big a deal then? Probably. I was using the product from the outside, and I clearly noticed how much better it was as a product. And I was what I call a power user of the product.
Right. And I had a lot of ideas in my head on how the product could be made better. But more importantly, you know, I, I gaining access to technology made a big difference in my life. And so I always felt the power of giving access to technology. The thing about Google, which appealed to me was you could be somewhere in rural Indonesia or you could be a professor at Stanford and you would get access to that information as long as the computer and connectivity with respect to the company today. You obviously have had some legal challenges and one legal challenge by the federal government.
They charge that your I guess your search engine was I hate to use the word monopolistic, but I guess they probably use that word. Is running the company more complicated because you have this lawsuit you have to deal with with scale and size? I think scrutiny is inevitable. And I we've always engaged very respectfully and responsibly through these processes, even in the current current ruling. I mean, the ruling goes to great lengths
to point out that we we have achieved success by innovating. Our competitors acknowledge that we are the best search and search engine in the world. We definitely disagree with the ruling, but we're still in the middle of the remedies phase and we will appeal and this process will likely take many years. And, you know, I'm confident, given that, you know, we are focused on innovating, using technology will do well in the long run.
And just last week, there was a European Court ruling which overruled the earlier decision, but the process had taken almost ten years straight. So these things take a while. So were you surprised that the US government, after they won that case, they filed another case against you? Were you surprised that that happened and you expect that to go on for a while to this one is not to do with our advertising on our search engine. The other one is we provide an ad platform for publishers to run advertising on their sites. And so we provide a platform. And so this is focused on that part of our business, part of our business. Again, we are you know, that case is just getting underway. So I expect it to take take some time.
And, you know, but look where we can figure it out in a constructive solutions. I think we will where we think it really harms our ability to innovate on behalf of our users or, you know, we are going to be vigorous in defending ourselves and it's going to take time for for it to play out. Silicon Valley has been enamored with artificial intelligence. A.I. Everybody thinks that they need to have A.I. attach their name or or be a leader in it. Chat Chibi CBT got out to the public first, but you've been working on it for a long time. Maybe before Openai did.
So are you going to go more public with what you're doing in in artificial intelligence? And how is artificial intelligence going to change your company? I mean, it is it's been a big focus for us as a company. One of the first things I did as CEO was to pivot the company to be focused on A.I. first. You know, we we have developed a lot of
the core underlying technology, a lot of it power search today. So part of what has helped us keep search about everyone else is by incorporating a lot of A.I. in how we how we do search. The current moment around generative A.I. is what's captured people's imagination. We are incorporating that in search in a deep way. So today, if you go to Google and type
Aquarian, we we give for many queries. We give something called an AI or view and you get a nice summary on top, which we are summarizing the top processes and giving context around it. Using A.I.. It's been very well received. People love it. And so it's, you know, it's one direction in which we are using AI to evolve our product. We have our models are called Gemini, and people can also talk to Gemini directly. And I just feel like we are very, very early stages of what is probably the most profound shift in technology we will ever see as humanity.
So it's an exciting time today, if I want to. Do a search. I suppose I look your name up on a search and I come up with your bio and so forth.
And then maybe articles written about you will appear on this, and then maybe those articles will guide me to, let's say, an advertising site or something. But with a high. Some people are worried that your I will basically have all the information and therefore they won't they the advertisers won't have anybody coming to their site any longer. So how do you address that issue today? We past 25 years. People come to Google because they're not only looking for what they want, but they enjoy the richness and the diversity of what exists on the back, Right? So people are clicking through and going to a lot of sites. That is important for us. That's what makes this a thriving ecosystem.
So even as we are evolving the product with the API, one of our core design principles has been making sure it works that way, right? And so we are prioritizing approaches which will send traffic to publishers. And in the case of commercial queries, advertisers will also benefit as well. But that's, you know, we think about it holistically because I think that's what allows people to create great content and create that virtuous cycle.
So advertisers, are they concerned that somehow the AI search function you have might get them bypass? And the way we think about it as users when they come looking for information, there is some aspect of it where they are looking for commercial information. It's naturally in the user's intent, and when their intent is commercial, you know, advertising turns out to be very, very relevant information. That was a core insight behind how we monetize Google search that adds a valuable information When users have a commercial intent, that doesn't change just because there's a new underlying technology, right? People are always looking for commercial information and providers of that information merchants, businesses are trying to reach users. And so that dynamic will continue to exist. So Google is more or less the search
engine part of your company. Alphabet has other parts. Let me ask you about some of them. I could, but maybe if I could step back. You know, Google has many businesses beyond search, right? So you have Google search. But think about Google Cloud, where we provide software to all enterprises. It's YouTube that there is YouTube and
so on. Yes, there's Android and so on. So think of Google as our, you know, Internet related businesses. And then we are using technology still, but we have other long term bets. Waymo was a bet on autonomous self-driving cars, and that's been a long term bet we having, which is a drone delivery company. We have Calico, which is pursuing long term drug discovery for difficult to treat diseases, etc.. So these are longer term bets and that's
what we call this other bets. Okay. So Waymo is a long term bet, I assume, but have you been in one of those cars? I'll make sure to go periodically and take a ride in. Waymo is phenomenal. The progress I've seen every six months. The last time I was in the car, the third time I was in Ed, you know, I was I was on my phone in the backseat. Once in a while. I tell myself, Look, I'm in a
self-driving car. It's amazing even how people sometimes look. And some people are curious. Some people are kind of like they're used to it.
You wear a helmet when you're in there or you're here. No, not at all. You know, quite the contrary. It's it's pretty relaxing. You know, we've been surprised at how much people like the experience we are now. We have scaled up to 100,000 paid rides every week in the in the US. We recently announced a partnership with
Uber, So you can use the Uber app in, for example, in Atlanta to hail, hail a car. You have a business. That's the cloud business you mentioned earlier. I think Amazon got to the cloud first and other big tech companies got there later. How significant is cloud to you now and
are you the person who kind of drove the cloud business here? I mean, it was one of the big areas I bet on us. I became CEO in 2015. And, you know, we realized Google was built in the cloud, Google search, Google Maps, Gmail, everything works.
We are a native cloud company and we are we are one of the best cloud infrastructure in the world. So we made a decision to really provide it to everyone else. And and, you know, and we we brought in CEOs who had real background to do that. Our current CEO, Thomas Creon, has really helped scale the business. Last quarter, we had over $10 billion in revenues. I think we are probably the number
fourth largest software company in the enterprise now. So it's one of our most robust businesses. And in fact, I announced him in one of our earnings call recently that we will exit 2024 with YouTube and Cloud. Billion dollar run rate. And these are businesses which we've
built from scratch for the past decade. So we've talked about cloud, which was a novelty ten years ago or so, and now AI is a bit of a novelty. What are the areas in the future that you think will be the next great tech interest for Silicon Valley and other people? Is quantum computing one of them? You know, I would view Quantum as one of those foundational technologies like A.I.. Over time, Quantum is, you know, is we fundamentally thinking about how to design different computers than classical computers? So I would view it as just like the idea that underlying technologies but these technologies are going to hopefully enable many, many amazing applications on top of them. You know, I you know, that's why compared to fire or electricity, you know, it's going to cut across every sector, everywhere. And people are going to be able to
rethink, think of this, you're getting really intelligent decision making systems to deploy everywhere. Let's talk about your background for a moment. So where were you born? I was born in India, in a city called Chennai, in the south of India. And did you grow up, you know, in a middle class? Kind of. Yeah. You know, it was a comfortable middle
class life in India. You know, but but one of the things was technology wasn't always around and we had to wait for a while before we were on a waiting list. At the time, only the government made phones and this was a rotary phone. So it was a five year wait list to get a phone. Right.
And so we got the rotary phone changed our lives. We were one of the few people in our neighborhood to have it. People would come to our homes to make calls to their loved ones. I recall I would have to it would be a four hour trip to find the black test results for my mother. Sometimes I would go all the way to the hospital and they would say, No, it's not ready. Come back tomorrow. And with the phone, I could call and get
that information right away. So it really, you know, showed me the power of technology. So where did you go to college? I went to a college called the Indian Institute of Technology.
It's a set of few institutions which are primarily focused on engineering. And what did you major in? You know, what do they call material science? And I assume you did okay. I did. Okay. You know, I had a chance to you know, I really got interested in computers and semiconductors and through my degree. And so I really was motivated by what was happening in Silicon Valley. I literally wanted to be in the place where semiconductors were developed. And that's why I had a chance to come to
Stanford. You went to Stanford to get a masters degree and an engineering. That's right. And did you get a scholarship or how to get to afford that? I mean, it was very fortunate to get a full scholarship.
I was a teaching assistant who had left the United States. Had you left India before that? Had you ever been out of and coming to the US was the first time I was ever on a plane. Right. So you got your master's degree and then you went to Wharton to get your MBA? I only seen the West Coast. I wanted to see more of the US. I, uh, through fall, I came to the East Coast, loved the seasons, so I just wanted to spend time back.
Back east. And so it was also I, you know, my, my goal with it was to get exposed to, you know, I had a deep engineering and scientific background, so a chance to get exposed to other walks of life. How does a business work? I get exposed to people from finance, from economics. And so that was all part of what I was looking for. So you got your MBA from Wharton. That's then. What did you do?
You know, pretty much very soon after that I ended up at Google, but I spent a short time at McKinsey before that. Yeah. So are your parents alive? They are. And, you know, I think they must be pretty proud of your you're the CEO of Google and Alphabet that they call you all the time with advice or what do they do? You know, both.
You know, I am fortunate. I'm very close to them. I see them almost every week. But my my dad is, you know, kind of it shows me amazingly, he's 82. He relentlessly reads everything about,
you know, he's tried to keep up. He's not a software engineer by training. But a few years ago you wanted to know what our API is. And he has learned that.
So he tracks news closely. And so you just talk to me about it. Well, 82 is young. The United States is 82. So still young. There you go. And your mother, you talk to her all the time.
And, you know, she's I got my love of reading from a very young age, from from her due to financial circumstances. You know, she she was working as a stenographer. She stopped working to support the family. But, you know, she she was a voracious reader. And that's where I got my love of
reading from. And so. And did you meet your wife at Wharton, Stanford, or where back you know, we we both went to at Indian Institute of Technology. She was, you know, at the time there weren't that many women. So she was she was a pioneer in her own way of breaking through. And so I met my wife in undergraduate. And so you now been married how long? Over 25 years. In five years.
And you have two children? Two children? That's right. And do they run around Silicon Valley bragging, saying, my father is the CEO of Google or they don't have quite the contrary. I think, you know, they're trying to find their own voice. And, you know, we hardly talk about my role or anything in the context of my family. That's I go to restaurants, Silicon Valley with your wife.
Do people come up with resumes all the time or ideas for funding things? How does that work? Oh, yeah. People less Lester as he may part, you know, maybe people who want to picture or want to say hello. And so that does happen, particularly in Silicon Valley, but you know, doesn't always happen. I kept a reasonably private life, so that helps. I think humans interact with the world in very natural ways. We see things, we hear things we speak, and so that's an example of how we can search.
Make search better and I can play a role to. All right. Let's talk about the company today. So as I mentioned earlier, you have I think it's 182,000 employees and the company has a market capitalization today of about two and a half trillion or something. Yeah, it's over $2 trillion. Over $2 trillion.
So the market capitalization has doubled since you've been the CEO and the stock price has more than doubled since you've been the CEO. So do you tell the founders, look, you've done a great job and maybe they should give you a big piece of the company or something, huh? Okay. I'm very fortunate to be compensated. Well, look, I think for me, look, as a technologist, you know, I feel like I'm at the front front row of, you know, dreamt about things like A.I.
for a long time, to actually see it getting built now and to see this transition play out in front of us. To me, that's the most motivating thing I could ask for. I also know that Google in the early days had a policy of free food for its employees, and I sampled some of your free food at lunch today. It was very good. Yeah, you obviously have to spend a lot of money.
You've got a 182,000 employees. So giving them lunch or breakfast or dinner every day or for many of them every day, you must have a calculation that says, Are we spending this much on food? We're getting this much higher productivity. And how do you assess that and why do you think other companies don't give away food as much as you do? Quite the contrary. I think in technology, if you go to the Bay Area, I think a set of things which Google has done as part of now standard modern workplaces in the Bay Area. But you know, people value in-person collaboration to us. You know, I can recall several times when I was working at Google early on, being in cafes, meeting someone else, talking, getting excited about something. And so it sparks creativity, it creates
community. And and and I think the benefit that comes out of it, you know, far dwarfs the costs associated with it. Google is regularly considered to be one of the most favorable places to work for employees, always high in surveys. And so I assume you've got lots of people who always want to come here. How many people a year try to apply for
jobs at Google, as I assume it's a million people or something more than that? What I'm proud of is the metric I look at is when we make an offer, what percentage of people accept the offer? And you know, it is percentages. It's almost close to 90%, right? So typically, if somebody wants to get a job, somebody is watching this and says, I want to work at Google, what are you looking for? I choose my work quotient. And it used to be said that you had a very complicated inner interview process.
I don't know if you still have that, but what's the best way to get a job here for an entry level person? Look, we are you know, it depends on whether you're in engineering or something else. But, you know, we we are you know, if you're an engineering, we are looking for really good programmers, people who understand computer science well and, you know, can can be dynamically, you know, are willing to learn and grow, apply themselves into new situations and do well. But we are really looking for, you know, you know, superstar software engineers. Right?
So so when you're doing a search yourself, I suppose you want to get information. Do you ever have frustrations that you can't get what you want? I mean, sometimes I can't find what I want, but I'm not the CEO of Google, So I assume you can have better access to the search than I can. I know there are one of the reasons I'm so excited about A.I. improving search is, you know, we constantly people don't always formulate the right queries. You know, we are constantly working to
make search easier to use. So, for example, you can now, you know, speak with search as well as take pictures and ask search questions. In many countries, for example, in places like India, a large volume of our queries actually come by, people just talking to search. And you know, because people get phone, not everyone is comfortable typing in these phones. They just talk, talk to Google.
Similarly, what we call visual search, we have a protocol Google lens and you can take a picture and ask questions. We get billions of queries through visual search. Humans interact with the world in very natural ways. We see things, we hear things we speak.
And so that's an example of how we can search, make search better. And I can play a role. I constantly am challenging our product, find things we could be doing better, and then I'm emailing my team. So leaving the US government aside, what do you see as the biggest challenge to Google and Alphabet going forward? Is it competitors coming along? Is it new technology that you're not in yet coming along and being very important or just keeping your organization efficient and not bureaucratic? What do you see as the biggest challenges? Look, one of the things I would say because we have always been a foundational technology company and we are working on these technologies which can apply across many things. I think one of the things which is unique to Google and Alphabet is, you know, we have a chance to go do many things, but but being disciplined, doing a few things and doing them well and doing it with a relentless focus on innovation and doing it as efficiently as possible as a company with discipline is what leads to long term success. And so so I think that's what I think
about. Right. You know, where all can we do it ourselves as a company? Where do we partner and enable others? That's why Google Cloud has been a big part of our focus because there are many sectors in which the best way we can help the world and have a good business doing so is by providing our technology and solutions to others. And so, you know, getting that balance right, who's.
2024-10-11