2017 A Founders’ Letter Computation Explosion Sergey Brin, President, Alphabet The power and potential of computation to tackle important problems has never been greater. In the “It was the best of times, last few years, the cost of computation has continued it was the worst of times, to plummet. The Pentium IIs we used in the first it was the age of wisdom, year of Google performed about 100 million floating it was the age of foolishness, point operations per second. The GPUs we use today it was the epoch of belief, perform about 20 trillion such operations — a factor it was the epoch of incredulity, of about 200,000 difference — and our very own TPUs it was the season of Light, are now capable of 180 trillion (180,000,000,000,000) it was the season of Darkness, floating point operations per second. it was the spring of hope, it was the winter of despair …” Even these startling gains may look small if the promise of quantum computing comes to fruition. So begins Dickens’ “A Tale of Two Cities,” and what For a specialized class of problems, quantum a great articulation it is of the transformative time computers can solve them exponentially faster. we live in. We’re in an era of great inspiration and For instance, if we are successful with our 72 qubit possibility, but with this opportunity comes the need prototype, it would take millions of conventional for tremendous thoughtfulness and responsibility as computers to be able to emulate it. A 333 qubit technology is deeply and irrevocably interwoven into error-corrected quantum computer would live up our societies. to our name, offering a 10,000,000,000,000,000, 000,000,000,000,000,000,000,000,000,000, 000,000,000,000,000,000,000,000,000,000, 000,000,000,000,000,000,000,000x speedup. There are several factors at play in this boom of computing. First, of course, is the steady hum of Moore’s Law, although some of the traditional measures such as transistor counts, density, and clock frequencies have slowed. The second factor is greater demand, stemming from advanced graphics in gaming and, surprisingly, from the GPU-friendly proof-of-work algorithms found in some of today’s leading cryptocurrencies, such as Ethereum. However, the third and most important factor is the profound revolution in machine learning that has been building over the past decade. It is both made possible by these increasingly powerful processors and is also the major impetus for developing them further. The Spring of Hope The new spring in artificial intelligence is the most significant development in computing in my lifetime. When we started the company, neural networks were a forgotten footnote in computer science; a remnant of the AI winter of the 1980’s. Yet today, this broad brush of technology has found an astounding number of applications. We now use it to: • understand images in Google Photos; • enable Waymo cars to recognize and distinguish objects safely; • significantly improve sound and camera quality in our hardware; • understand and produce speech for Google Home; Expectations about technology can differ significantly • translate over 100 languages in Google Translate; based on nationality, cultural background, and political • caption over a billion videos in 10 languages affiliation. Therefore, Google must evolve its products on YouTube; with ever more care and thoughtfulness. • improve the efficiency of our data centers; • suggest short replies to emails; The purpose of Alphabet has been to allow new • help doctors diagnose diseases, such as applications of technology to thrive with greater diabetic retinopathy; independence. While it is too early to declare the • discover new planetary systems; strategy a success, I am cautiously optimistic. Just • create better neural networks (AutoML); a few months ago, the Onduo joint venture between … and much more. Verily and Sanofi launched their first offering to help people with diabetes manage the disease. Waymo Every month, there are stunning new applications has begun operating fully self-driving cars on public and transformative new techniques. In this sense, roads and has crossed 5 million miles of testing. we are truly in a technology renaissance, an exciting Sidewalk Labs has begun a large development time where we can see applications across nearly project in Toronto. And Project Wing has performed every segment of modern society. some of the earliest drone deliveries in Australia. However, such powerful tools also bring with them There remains a high level of collaboration. Most new questions and responsibilities. How will they notably, our two machine learning centers of affect employment across different sectors? How excellence — Google Brain (an X graduate) and can we understand what they are doing under the DeepMind — continue to bring their expertise hood? What about measures of fairness? How might to projects throughout Alphabet and the world. they manipulate people? Are they safe? And the Nest subsidiary has now officially rejoined Google to form a more robust hardware group. There is serious thought and research going into all of these issues. Most notably, safety spans a wide range of concerns from the fears of sci-fi style The Epoch of Belief and the Epoch of Incredulity sentience to the more near-term questions such as validating the performance of self-driving cars. Technology companies have historically been wide- A few of our noteworthy initiatives on AI safety are eyed and idealistic about the opportunities that as follows: their innovations create. And for the overwhelming part, the arc of history shows that these advances, 1 • Bringing Precision to the AI Safety Discussion including the Internet and mobile devices, have 2 • DeepMind Ethics & Society created opportunities and dramatically improved 3 • PAIR: People+AI Research Initiative the quality of life for billions of people. However, 4 • Partnership on AI there are very legitimate and pertinent issues being raised, across the globe, about the implications and I expect machine learning technology to continue impacts of these advances. This is an important to evolve rapidly and for Alphabet to continue to discussion to have. While I am optimistic about be a leader — in both the technological and ethical the potential to bring technology to bear on evolution of the field. the greatest problems in the world, we are on a path that we must tread with deep responsibility, care, and humility. That is Alphabet’s goal. G is for Google Roughly three years ago, we restructured the company as Alphabet, with Google as a subsidiary (albeit far larger than the rest). As I write this, Google is in its 20th year of existence and continues to serve Sergey Brin, President, Alphabet ever more people with information and technology products and services. Over one billion people now use Search, YouTube, Maps, Play, Gmail, Android, and Chrome every month. This widespread adoption of technology creates new 1. https://research.googleblog.com/2016/06/bringing-precision-to-ai-safety.html opportunities, but also new responsibilities as the 2. https://deepmind.com/applied/deepmind-ethics-society/ 3. https://ai.google/pair social fabric of the world is increasingly intertwined. 4. https://www.partnershiponai.org/ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (Address of principal executive offices) (Zip Code) Commission (I.R.S. Employer incorporation or organization) (Registrant’s telephone number, including area code) File Number Identification No.) ALPHABET INC. Delaware 1600 Amphitheatre Parkway 001-37580 61-1767919 Mountain View, CA 94043 (650) 253-0000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of each class Name of each exchange on which registered Class A Common Stock, $0.001 par value Nasdaq Stock Market LLC (Nasdaq Global Select Market) Class C Capital Stock, $0.001 par value Nasdaq Stock Market LLC (Nasdaq Global Select Market) SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Title of each class None Alphabet Inc. Indicate by check mark YES NO •• if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. •• if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. •• whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. •• whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). •• if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. •• whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.