Good morning. Thanks, everybody, for joining. I'm delighted to be welcoming Microsoft to the conference here on stage. I'm Brad Sills, a Senior Analyst covering Large-c ap software, including Microsoft. We're very fortunate today to have Yusuf Mehdi, who is Consumer Chief Marketing Officer and Corporate Vice President. Thank you so much, Yusuf, for joining us. Thanks, Brad. Great to have you here. Yeah. Thank you. Why don't we just start, Yusuf, with, a little bit of your background and, your role at Microsoft as Chief Marketer for the consumer? Yeah, great. Please. It's great to see everybody. Good morning. At Microsoft, the role I play is I run essentially product marketing, product management for most all of the consumer products at the company. This includes Windows, our Surface device portfolio, Microsoft 365 Consumer. Mm-hmm Most notably of late, Bing and Edge and all of our AI, consumer AI efforts. Wonderful. Why don't we just start high level? When we think of Microsoft, we think of the enterprise. Maybe if you could just touch on kind of the state of the Microsoft brand with the consumer and where are the key focus areas? Sure. you know, as a whole, with Microsoft, we, you know, are fortunate to have a very strong brand on a worldwide basis. We have great strength in the enterprise, as you know. Mm-hmm. That translates over into the consumer space because people are people, as we say, so they use our software at work and at home. Mm-hmm. You know, we have excellence in certain categories of productivity and creativity. Mm-hmm Where we're well known, and then, and now we're coming in new areas. Obviously, with Windows, we've got strength, and then with Bing and Edge. Mm-hmm. Wonderful. Great. We saw the launch of the new Bing early this year, and I thought the demo was impressive. Wanted to just get your thoughts on, you know, what was the motivation behind that? What are the use cases you're going after with Bing in search? Sure. Well, you know, the big opportunity that we saw with the launch of the new Bing is that there are roughly about 10 billion search queries that happen every day, and at least a half of those, by our count, go unanswered. Mm-hmm. People aren't getting the answers to the questions they want. Mm-hmm. These are things like, you know, longer travel queries, you know, more sophisticated research. Mm-hmm. We saw an opportunity to marryS the power of AI with Bing. Mm-hmm Create a new interface to go after that. Mm-hmm start to solve some of those problems for customers. You know, and we're seeing some good success already early on with that. Wonderful, wonderful. Would love to get your comments on the OpenAI partnership, and the integration there. Yeah With Bing and in general across Microsoft, if you could. Sure. Please. You know, as many of you may know, we have a very tight relationship with OpenAI that dates back now multiple years, to about 2019. We've worked together, with them to start from the foundation. We've helped provide the cloud power behind the phenomenal work that they've done in AI through large language models. Mm-hmm With Azure, w e've built the supercomputer. Mm-hmm That powers all of that training and the inferencing. Mm-hmm. These are very high-end, sophisticated computers. There was special work done for that. Mm-hmm. We did that work. Then, you know, more recently now with Bing, we've worked together. We've built a proprietary technology inside of Microsoft that we call, codename Prometheus. This is a proprietary way that we have to access the large language model, to access the AI. Mm-hmm Get the most out of it. Essentially, think about taking the power of the web index, our understanding of the internet. Mm-hmm Of web pages, which there's only, you know, essentially two companies that really have that kind of power. Mm-hmm. We can now more intelligently call, access the AI, refine the answers, and get that back. We've worked together with OpenAI in a number of ways on that. Mm-hmm. From ChatGPT, we made an announcement at our developer conference last week that we are now going to enable with them, the ability to use search within ChatGPT, just like we have with Bing. Mm-hmm. Today, with Bing, we have a very differentiated offering. Mm-hmm Which is you can not only access the AI to answer questions, but we can call the internet. Mm-hmm. That means we can reference things. It means we have more timely data. Mm-hmm. Those are real strengths, and that we're continuing to partner with ChatGPT on that. The final thing is, we announced with them a common plugin architecture. Mm-hmm. As third parties want to now come in and write on this new emerging platform, when developers write a plugin, it'll run on Bing and on ChatGPT. Mm-hmm For that matter, on all of our Copilots at the company. Wonderful. At the time of that launch, for the new Bing, you referred to the next-generation LLM from OpenAI that was coming, that's more tailored for search. Yeah. Would love to get any more color on that, please, if you could elaborate. Sure, yeah. At the time, you know, at the time, we were essentially running on an early version of GPT-4. Mm-hmm. If you. Already it's, you know, recent memory, but, at the time GPT-3 was out, we had more advanced results, and people were asking: "Why are your results so great? Mm-hmm. It's because we had been working on an early version, so that's what we were referring to. Mm-hmm. OpenAI confirmed that, you know. Mm-hmm About a month or so later after they announced it. Got it. What has the results been so far in terms of the relevance of Bing, since you've had this integration with OpenAI? Yeah. Please. Yeah, it's only been about four and a half months, but since the launch, we've had a bunch of great progress and milestones on that. Mm-hmm. First off, and just from in terms of usage, Bing has now surpassed 100 million daily active users. Mm-hmm Which, by all accounts of any kind of product on the internet, is a super impressive number. Mm-hmm. In the world of the internet, search, it's not that much. Mm-hmm. We're still single-digit player, which means we have a lot of upside. Mm-hmm. 100 million daily actives is pretty impressive. Mm-hmm. We've seen our mobile traffic increase 4x. Mm-hmm We've seen a lot of pickup now in usage of it. We've seen new users come. You know, I think back early on, we had millions of new users come and try Bing that hadn't before. Mm-hmm. It's really, I think, in our minds, started a new day in search. Mm-hmm A new round of competition. Wonderful. Thank you. There were some enhancements to the Prometheus model as part of this Bing overhaul, earlier this year. Could you elaborate on what Prometheus is, and what were some of those changes? Yeah. Prometheus is a little bit of some of what we, I was mentioning earlier. It's, it's our proprietary method for accessing. Mm-hmm. The Bing search index. We've used it effectively to do a couple things. Mm-hmm. One is to get better answers in Search. Mm-hmm. What will happen is let's say today you call an AI, in, you know, ChatGPT or something else. Mm-hmm. You get back an answer that gets created from the AI. We're able to check that against the search index. Mm-hmm To understand, hey, is that really something from there? We can use search data to help the answer get more relevant. Mm-hmm. We can footnote it. Mm-hmm. The other thing we've done is we've actually used AI in the converse, and we've applied it to our search ranker. For those of you who follow search, closely, improvements in search ranking is very tough. Mm-hmm. It's, you know, 20 years for us and Google. Mm-hmm. The largest increase, I think, in at least a decade, if not longer. Mm-hmm Came after we applied the AI, you know, sort of techniques Mm-hmm -to the search ranker. Now our results, I would say, rival Google's results in terms of relevancy. Interesting. Okay, great. You demoed some new use cases, you know, when you rolled out the new Bing. Are there any use cases that have surprised you, that you've seen more of, that perhaps maybe you didn't expect? Just any commentary you can make on, you know, how some of these new use cases for search are coming in with Bing. Sure. Yeah. Yeah, a couple different things. Like we said, first off, you know, I said about half of the queries that we see in search today go unanswered, and those were things like travel, like more sophisticated travel planning... Mm-hmm ... deeper shopping research. Mm-hmm ... sort of advanced kind of research. Those things we're seeing now in the early data- Mm-hmm that people are in fact, doing better queries. Mm-hmm. It gets kind of nuanced. Like, when you're in search, people might say, "Flights for $500. Mm-hmm. When people are in a chat interface, they might say, "Hey, help me plan a trip to Kenya. Mm-hmm. Two-week trip to Kenya. Mm-hmm. It's different questions, different answers. We're seeing people do more sophisticated travel- Mm-hmm analysis and planning as one example. Mm-hmm. We've seen a lot of people do much more research, historical discovery of information and content that they hadn't done before. Mm-hmm because it's the ease of use is now there. Mm-hmm. We've seen some changes in those things. You know, the big takeaway, though, is in the chat, when we see people chat, the vast majority of what they're trying to do is search specific stuff. Mm-hmm. If there was a question before we launched about whether the new AI and the new chat would revolutionize Search. Mm-hmm That has proven out, at least in our data. Mm-hmm. Wonderful. Okay, great. When you think about the advantages Microsoft has here in search, the data set that you're leveraging, if you could provide a little bit of color as to, you know, what that is and from your seat? Yeah. Sure, yeah, we have a, I would say we have a couple of really, you know, clear advantages. One is the OpenAI AI foundation model, it's very clear that is by far the best, most advanced model that's out there. Mm-hmm. You know, we've seen that through various testing. Mm-hmm. Number one, we're getting to leverage the most advanced AI foundational model. Mm-hmm. Second thing is, because of our Bing web index- Mm-hmm Like I said, there's really only two big search web indexes out there, we have a unique opportunity to be able to marry sort of daily crawling-. Mm-hmm up-to-date information, you know, deep search understanding Mm-hmm with the AI. Mm-hmm. That's a very unique thing that we can do. Thirdly, we, because we're more of a challenger, if you will, we have smaller share- Mm-hmm ... we're very focused on the new emerging customer needs, and we can take more, you know, we can take more steps to be innovative. Mm-hmm. the user experience that we've done with Mm-hmm what we're doing with Search on the search page itself. Mm-hmm And then the integration that we're doing with that, like we've announced Windows Copilot. Mm-hmm. We've put Bing on the Windows taskbar, so half a billion people now can get access to. Mm-hmm one-click access to Chat. Mm-hmm. Those are some unique strengths that we can bring to help people with their searches. Wonderful. Thanks, Yusuf. At the time of the launch, you referenced the convergence of the browser, you know, the chat, and search. If you could elaborate on that and how you see that direction. Yeah. One of the things that we see is most people don't. Mm-hmm between their browser and their search engine. They think of it as one concept. Mm-hmm. Right? Obviously, when you go in, I'm sure as you all use the Internet, you go into the URL address bar, and you type in. What we're doing is we're doing really deep integration of that search and chat capability in Edge. Mm-hmm that, so that you get what we think of as your Copilot for the web. Mm-hmm. Which means that as you go anywhere on the Internet. Mm-hmm not just on, you know, bing.com or- Mm-hmm some other Mm-hmm -site.com- Mm-hmm Anywhere on the web, if all of a sudden you want to apply AI to the page you're looking at... Mm-hmm ... For example, you go to a page, and you say, "Hey, tell me what this page is. Summarize a long PDF. Mm-hmm. Tell me the ingredients for this recipe. Mm-hmm. With one click on Bing, we can now read that page with the power of AI, and if you want, you can then go outside the Internet and access additional information. For example, you can say, "Hey, read this, you know, third-quarter report. Mm-hmm of financial earnings from company X. Mm-hmm. Give me the key takeaways. Mm-hmm. Compare their earnings in the last quarter against another. Mm-hmm put it in a table for me. Mm-hmm. You can literally do that all, anywhere on the web, on any type of content. Mm-hmm. That's an incredible merger and we're very unique in doing that right now. Wonderful. Thank you. What kind of impact have you seen from the new Bing and Edge on search volumes and engagement? Yep. Please. You know, a couple things. Like I said, our daily active users now have surpassed $100 million. We were on a path of growth. Mm-hmm ... but that has certainly picked up since we launched the new Bing. Mm-hmm, mm-hmm. likewise, our Edge browser has been growing share- Mm-hmm for the last eight quarters in a row. Mm-hmm. That's continued. If anything, we see when people use the new Edge with Chat, they spend more minutes on it, and they use it even more. Mm-hmm. All of the early signals, and this is still early data, but all of the early signals are very positive. Mm-hmm. In particular, when we see people use chat, we see them search more, we see them come back more frequently. Mm-hmm. The early signals are good, and now as we're starting to scale more broadly. Mm-hmm ... we'll see how that, you know, expands out. Great. Thank you. Thank you. When you think about Microsoft's advantage, I mean, we're all a lot of focus this week on AI and LLMs. What is Microsoft's advantage in training LLMs, you know, your own internal LLMs? Yeah. Again, we use OpenAI a lot for the LLM. Sure. They do a lot of the training. We work with them a bit, as we said. Sure ... um, on the- Mm-hmm ... Azure infrastructure, the supercomputers. Mm-hmm. We do a lot with our responsible AI. Mm-hmm. There's a lot of techniques we've done. We have an incredible, responsible AI, at the group, at the company. Mm-hmm ... across many dimensions, from- Mm-hmm ... ethicists, to researchers, to scientists, to user experience designers. We collaborate with OpenAI. Yeah on some of that as well. Sure. Of course, we have the web index and the search index, and so a lot of the learnings we have there, we're able to work with OpenAI on the training of the LLMs. Great. If you could comment on some of the challenges when, you know, faced when training LLMs, you know, data quality, bias, user privacy, you know, how do you see those challenges, and how is Microsoft and your partnership with OpenAI, how are you addressing that? Yeah. both us and OpenAI are really committed to having a super quality offering. Mm-hmm ... in the content, in the AI, in all of that training- Mm-hmm there's a lot of thought and care that has been put into making sure that, you know, quality content is, essentially, you know, clearly in there. Content that is, you know, of suspicious thing gets ranked appropriately. Fair. Then again, we do a lot of training to protect against, you know, sort of bad actors. Mm-hmm. We don't want people to use the AI to cause harm. Mm-hmm ... self-harm and harm in otherwise, sort of, bias against, you know, people. There's a lot of work that has been put in between ourselves and OpenAI to make sure we have really a, an inclusive and equitable solution. Mm-hmm. Mm-hmm. Wonderful, great. How does Bing, how do you approach the balance between personalization and privacy with search through Bing, yeah? Well, we think privacy is a very personal thing. Yeah. For us, privacy is built in by design in all of our products. Mm-hmm. We've put that work. Mm-hmm the way we design the service Mm-hmm how we gather data, how we store data. Mm-hmm. All of that is in there. Mm-hmm. I think first and foremost, privacy is of the utmost thing for us. Mm-hmm We protect against that. Within that constraint, we can start to build a real personal experience for people. Wonderful. Great, thank you. 10 years ago, you had the launch of Cortana. Curious to get your perspective on how Cortana fits in here, with ChatGPT and the Microsoft AI portfolio. Yeah, you know, I think, Cortana and other sort of like agents were early forerunners of, you know, different interfaces to try and access content. Mm-hmm. Where we are today with the new Bing... Mm-hmm ... in partnership with ChatGPT, is we have really now a much more advanced, powerful system that can, in fact, answer questions. Mm-hmm ... in the case of some of the work we're doing now with even Windows- Mm-hmm With Microsoft Edge, can take action on your behalf. Mm-hmm. you know, the tech there is really much, much more advanced, and I think it is sort of the future where we see things going. Great. Maybe we could talk about the Bing Image Creator, which is powered by OpenAI. What are some of the possible monetization opportunities there? Yeah. Please. Yeah, I think two different things probably we could take in turn. Mm-hmm. There is Bing Image Creator. For those of you who don't know, Bing Image Creator is a service where you can essentially create images just by typing in words. Mm-hmm. You can say, like, for example, I've used this, I'm doing a home remodel design. Mm-hmm. I've said, you know, "Help me design a mid-century, modern- Mm-hmm ... living room that has, you know, brass and wood and whatever," and it'll come back with a picture. Mm-hmm. I can say: "Oh, hey, make that rounded- Mm-hmm ... and let's change the color from black to white. Mm-hmm. It can do that. Mm-hmm. It's an incredible thing. Since we've launched that, we've had hundreds of millions of people, images now created. Mm-hmm. It's probably one of the most exciting features that we've seen. Mm-hmm. We've put that in chat, the ability to iterate. If you guys haven't all tried it, bing.com, go up there now and go into chat in creative mode, although we've just launched it in all the modes, and try it and say, "Create an image of XYZ. Mm-hmm. You can see the power of it. That's a great feature. Mm-hmm. Separately, I think, question you're probably at after, right, is like a broader thing. What's going on with monetization? Mm-hmm. What are the opportunities there? Mm-hmm. It's obviously super early days. Mm-hmm. Two, I think, of monetization, sort of innovation happening in two sort of segments. There is what happens on the classic search page. Mm-hmm ... where in there, we're seeing, as we get more relevant answers, we're able to kind of use traditional search advertising. Mm-hmm. That's doing really well. Mm-hmm. There's the chat interface, where obviously it's a different user experience. It's cleaner. Mm-hmm. You know, there's more chat, and so, you know, does it make sense to have a lot of answers there with a lot of, you know, advertisements? Mm-hmm. Obviously, one of the things people are liking about chat is that you don't have all the blue links, that you can get right to the answer you want. Mm-hmm ... and then go find. Mm-hmm. We are, right now experimenting a lot with our content publisher partners. Mm-hmm With advertisers on what is the ad opportunity within the chat window. Mm-hmm. We're finding good things. We're finding the ability to, for example, have links to more content. Mm-hmm. That's one thing that's been very unique with what we've done with Bing. Unlike any other services, we put citations and footnotes. Mm-hmm. We're also having richer, answers in some cases we're testing. We're testing the ability to potentially have right ads on the page. We're flighting all that now. Mm-hmm. As you can imagine, advertiser demand is very high. Mm-hmm -for this because they know this is where there's a lot of action. Mm-hmm. It's still very early to say how it'll play out, but my guess is that, you know, my sense is a couple of things: One, you'll see fewer ads. Mm-hmm they'll be much more relevant. Mm-hmm. They'll have much higher click-through rate. Mm-hmm. I think it'll be a very disruptive experience to traditional search- Mm-hmm which for us is all goodness, because, again. Mm-hmm early and we're happy to engage with. Mm-hmm with a new and improved search experience. Mm-hmm. We're in the beginnings of that process. Wonderful. Thank you. Thank you, Yusuf. Why don't we shift gears to Windows and the PC business? What are some of the key focus areas for consumer in the roadmap for Windows? Yeah, Windows broadly? Yeah, please. Yeah. A couple different things. Let me just start and just kind of give an update on Windows. We are now at an all-time high in terms of Windows usage and engagement. You know, I think we're over 1.4 billion people- Mm-hmm ... use it monthly. A huge majority of that, uses it daily. Mm-hmm. Mm-hmm. We've seen usage of Windows go up. We've seen use cases since the pandemic go up. Mm-hmm. The pandemic had many bad things, but one small silver lining is we saw people return to use the PC. Mm-hmm -and they rediscovered- Mm the value of the PC. You know, previously, you know, all of us live a lot on our phones. Mm-hmm. People saw they could use the PC for things like, you know, video conferencing. Mm not just for work, but for home use, right? Mm-hmm. For staying in touch with family. Mm-hmm. online shopping. Mm-hmm went up, telemedicine- Mm-hmm went up, you know, grocery delivery. People, since the pandemic has sort of subsided, people have continued to do those use cases. Mm-hmm because of that, and so that, the value of the PC probably has never been higher. Mm-hmm. That has been one of the great things that we've seen. More recently, with Windows 11... Mm-hmm We've made great strides to make that much more cloud powered. Mm-hmm As we're starting to talk about it, AI-powered. A couple of things. On the cloud-powered side, it's hard to believe, but Windows 10 did not require a login sign-in. Mm-hmm. Imagine using your iPhone and not signing in. Mm with an ID. You couldn't imagine it, right? Mm-hmm. The phone wouldn't make any sense. Mm-hmm. Maybe you would make a phone call, but that'd be about it. Mm-hmm. Windows, until Windows 11... Mm About a year and a half ago, we didn't require that. Mm-hmm. Now that we do, we're seeing the use of Windows change dramatically. People are now... We have a very high login sign-in rate. Mm-hmm. Now, we can give you a personalized news feed. Mm-hmm. We have widgets now, which is a new platform for people to do development. Mm-hmm. That's much more personalized. People are able to back up their content. Mm-hmm. They can roam their files. Mm-hmm. All these things that you take for granted on your phone, we've brought to the PC, and so the value of the PC has gone up quite a bit. Mm-hmm. That's been one thing we've done. Much more cloud powered, much more service enabled with Windows. Mm-hmm. We're also then most recently announced that we're now enabling you to be able to send messages from your phone... Mm-hmm -via either an Android or an iPhone. Mm-hmm. If you've always wanted to have your text messages come into, your PC. Mm-hmm you can now do that. Mm-hmm. That's a huge thing that I've always wanted. Mm-hmm. We still have more work to do. You can't necessarily do group messages, but you can do the individual messaging. That's great. Most recently, the AI has now come in. Mm-hmm. We announced at Build, two weeks ago- Mm-hmm ... Windows Copilot. Mm-hmm. Windows Copilot is essentially powered by Bing. Mm-hmm. You get all of the power of the internet, all of the power of the intelligent agent. Mm-hmm now within Windows. Mm-hmm. Just like I referenced with the Edge example. Mm-hmm you can use your PC experience and ask it questions to about what's going on on the things on your desktop to take advantage. Mm-hmm. You can take what we call actions, like you can do in Edge. Mm-hmm. Now with your Windows, if you've, you know, if you've ever sort of said, "Hey, how do I put this thing in dark mode? Mm-hmm. You can just pull up Windows Copilot and say, "Put my PC in dark mode. Mm-hmm. Put me into focus mode because I have to work now. Mm-hmm. It will arrange your Windows-. Mm-hmm ... dial in your playlist. Everyone who didn't know how to use Windows is now gonna be a power user of Windows. Mm-hmm because you now have the Windows Copilot Mm-hmm that you can just talk to, and it'll take action on your behalf. Wonderful. That's exciting. Great. Yeah. Thank you for that. I can't wait for that myself. Yeah. Why don't we, if we could, talk about the interplay with Xbox Game Pass and Windows, and what's on the roadmap there for the convergence of those two? Sure. Yeah. One of the things that's been great as we look at our Xbox business is we've seen a lot of, obviously, great success on the console. Mm-hmm Gaming and online gaming. We're seeing a lot of success now with gaming on the PC. Mm-hmm. PC has always been a home to obviously gaming. It's the Mm-hmm ... platform for games. Mm-hmm. Now with Xbox, we're starting to really see. Mm ... progress there. We've brought our Game Pass subscription service that lets you play games across console and PC. Mm-hmm. Mm-hmm. In fact, we almost doubled the total number of countries now that have Game Pass. Mm-hmm on the PC. We've seen that tick up quite a bit. Mm-hmm. We've got some great experiences there with an Xbox app on Windows. Mm-hmm. You can keep track of your friends, your gamer profile, all of your gamer stats, and so that has all come together. Mm-hmm. We're seeing really good progress there on the PC. Great. Great, why don't we shift to devices? You know, Surface tablet, laptop. Where's the focus on the product line? Anything on the roadmap there as well? Yeah, please. Yeah. We're really focused on the core of our Surface portfolio, which is primarily the Surface Laptop- Mm-hmm The Surface Pro. Mm-hmm our two-in-one. Mm-hmm. You know, the Surface Pro continues to be really an unrivaled and unique product on the marketplace. Mm-hmm. Mm-hmm. It's the only two-in-one, as we like to talk about it. Mm-hmm. It is the tablet that can replace your laptop. Mm-hmm. You have a full tablet. You have an incredible screen with pen. Mm-hmm. You have access to all of Windows on that. Mm-hmm. That is a big focus for us. We're continuing to improve on that. Mm-hmm. Performance has gotten better. Mm-hmm. We've had 5G capabilities on it now. Mm-hmm. Mm-hmm. You can move around, and now with Windows 11, you can take advantage of it. It is by far the best devices for mobile professionals and for creatives. Mm-hmm. On the laptop, we've continued to do a lot of work to build more and more powerful laptops. Mm-hmm that again, give you that real incredible computing experience with Windows. Mm-hmm. That's really been the big focus. Yeah, the innovation trend continues. I can't talk about things that are coming in the future but. Right ... you know, suffice it to say that if you're a Surface fan, there's a few Surfaces out there, you're gonna want to continue to use it. That's great. Thank you. On the Q3 earnings call, you called out some elevated inventory levels there, if you could elaborate on that, please? Sure. Yeah. You know, what happened because of the pandemic, there's been sort of ebbs and flows on, PC purchasing. Mm-hmm. how the PC market's gone. Mm-hmm. One of the things that happened is people bought a lot of PCs. Mm-hmm ... I think in advance of they were thinking of return. Mm-hmm. We saw elevated inventory channel levels. Mm-hmm. Sell-through has continued, so sell-through has continued sort of steady. Mm-hmm. Obviously, what's happening is we're seeing retailers wanna work down the inventory levels. Mm-hmm. The way that, you know, impacts us. Mm-hmm short term, there's less sell-in. Mm-hmm. The sell-through continues. Mm-hmm. And it's working its way through. Mm-hmm. Yeah. Great. Great. I think you're also, you have responsibility for Skype? Yes. Yeah. Okay, great. There's clearly an investment being made there. Any commentary on where those key investment areas are for Skype, and how does that fit into the broader consumer portfolio? Yeah, I think the way I think about it, and, I mean, take a step back from that. Yeah Like, on, in terms of communications, consumer communications- Yeah we really have a couple different assets. We have Teams. Mm-hmm ... that you use a lot for work, but we now have Teams for Consumer. Mm-hmm. That has been growing nicely in terms of monthly active users. Mm-hmm. Still early. Mm-hmm. We have Skype, as you referenced, which is something we've had for traditional- Mm-hmm ... that still has a very loyal fan base. Mm-hmm. We have this product called GroupMe. Don't know if you have GroupMe, but if you have kids, they all use GroupMe 'cause it's a huge hit in college. Mm-hmm. Those three products, what we're looking at doing is increasingly bringing them together on a common platform and architecture. Mm-hmm ... while still respecting the user experience that people love on each of these- Mm-hmm ... things, right? With GroupMe, people, college kids love the simplicity of it. Mm-hmm. With Skype, people love the ability. Mm-hmm ... friends and family from across international lines. Mm-hmm. Teams Consumer now is really becoming a great place for communities. Mm-hmm ... for people to come together with communities. Mm-hmm. We have brought, a lot of the new Bing and AI into those products. Mm-hmm. getting to Skype specifically, which you asked about... Mm-hmm we've, one of the things we've done with Bing and AI is we've put, essentially a chatbot- Mm-hmm ... in Skype. Mm-hmm. If you are talking with your family, for example, and you're planning a night out or a trip. Mm-hmm you can call the Bing chatbot and say, "Hey, Bing, tell me great places to travel. Mm-hmm. Bing will put that together and drop it in the chat window. While you're chatting with your family, you can actually call the chatbot to help you. It's like having a intelligent assistant or a concierge or a butler. Mm-hmm ... help you while you're conversing, you know? Mm-hmm. Mm-hmm. Mm-hmm. We see that expanding as we add the capabilities. Okay, wonderful. How does Microsoft think about some of the overlap between, you know, Skype and Teams, or is it truly complementary as you're describing there? Yeah, I think we see it as complementary on- Mm-hmm ... the core infrastructure, right? Yeah. The communications, the idea of having one contact list. Yeah. We think of the user experience as being unique. Mm-hmm Distinct for those. Mm-hmm. like I said, Teams is focused on increasingly more on some communities. Yeah ... getting groups of people to do that. Skype is more sort of point-to-point, family- Mm-hmm ... much more for international expansion. Wonderful. maybe just a higher level question, you know, when you think about, you know, the Microsoft brands, you know, again, a lot of enterprise association, how does that benefit Microsoft and the consumer with, you know, with Windows PCs and, you know, some of the other offerings you talked about? Yeah. Well, the, our strength in enterprise and at work- Mm-hmm ... is that we are the tools and the devices, the software, the devices that people use every day for- Sure ... for their work. Mm-hmm. That, you know, that becomes a real reason that people then wanna come and use it in their home life. Mm-hmm. That provides a nice virtuous cycle. Conversely, when we sell- Mm-hmm ... our Surface devices in particular that people love Mm-hmm they come and then wanna bring those into work. Right. I see that with my kids who are now working. Mm-hmm. They'll have a laptop that they got from work, I won't say from where, and then, of course, I'll buy them a Surface for their birthday. Mm-hmm. They're like: "Dad, that's awesome!" I'm like: "Well, take that into work. Right. They're like: "Well, we're not allowed to," in some cases. Yeah. I'm not allowed to. You know, we have a... Sure. ... kind of thing." They're like: "Gosh, I wish I could use my Surface. Yeah. Then vice versa, I've had people who have a computer at home, and then they love the Surface they got at work. Yeah. That flywheel for us of consumer to commercial is a very unique thing. Again, like all of us, we have jobs, and we have personal lives. Mm-hmm. Being able to use a single device, being able to use a single productivity suite, an email- Mm-hmm ... a browser- Mm-hmm ... that virtuous cycle of, you know, work to consumer and back. Mm-hmm ... really benefits us in terms of, being able to better meet customer needs. Got it. Got it. maybe shifting to Xbox a little bit, you know, the strategy has always been, you can play games from anywhere on any device. It's less console-centric, you know, strategy. If you could just comment on, you know, how you see the convergence of the, you know, Game Pass with the PC and how that fits in with that overall strategy. Yeah, I mean, I think you said it well. We believe that, you know, the future of gaming. Right now, there's three different gaming silos. Mm-hmm. There's games on your phone. Mm-hmm ... games on your PC, and games on the console. Mm-hmm. Historically, those have been three different worlds. Mm-hmm. Frankly, three different audiences. Mm-hmm. You know, we, our vision for Xbox is that you should be able to play the games you want, with the people you want, on the devices you want. Mm-hmm. what we've done is we've built much more of a cloud gaming solution. Mm-hmm that can now work across all those devices. Mm-hmm. We're taking all of the steps. Like I mentioned earlier. Mm-hmm ... having Game Pass, give you the ability to play games on the PC and the console. Mm-hmm. You buy them once, and you can run them across both those platforms. Mm-hmm. We're building that capability. We're bringing the Xbox app out to all those platforms. Wonderful. Great. When you think about, you know, Microsoft Studios, you know, what are some of the things you're excited about that, you know, you can talk about here that might be coming? Yeah. I mean, there's a lot of great games coming. Yeah. There's a big one that's coming up. I don't know how much we've talked about it, so I probably won't mention it, but it's coming up shortly. Mm-hmm. The team has been playing that game a lot, and, we're pretty excited about it. I think it's, it'll be a sort of a great look forward in terms of what gaming can do. Great. You know, as a whole, the studios team does a really fantastic job. Mm-hmm building next-generation content. Mm-hmm ... the fastest, you know, form of growing entertainment, and we think that the ability to expand upon that with AI will improve quite a bit. Great. How do you see the convergence of, you know, gaming with the metaverse in the enterprise potentially? You know, I think the talent base that you have there, engineering talent, you could apply a lot of that. You could, you could deploy some of those resources towards the metaverse. Curious to get your perspective on how you see that playing out, and where is the talent base for the metaverse within Microsoft, and is there overlap between, you know, the gaming franchises in those applications? Yeah, I mean, I think from a technology perspective, you know, a lot of games, not all games, but a lot of games are about world development. Mm-hmm ... character development. Mm-hmm. The techniques in terms of how you do the programming, how you do the design of that software. Mm-hmm ... to build, that is applicable in the metaverse Mm-hmm ... you know. Mm-hmm. Of course, we have all of our own work that we've done in the enterprise space. Mm-hmm to build sort of digital twins, if you will. Mm-hmm. Yeah, I think there's a lot of you know, relevance there. Wonderful. We're running short on time here. Any other comments, Yusuf, that you'd wanna make? Any kind of closing comments on kind of the state of the Microsoft consumer brand across multiple franchises? I think what I would say is that, you know, one of the things we've probably been at the best place we've been in our consumer business in a while because we see the opportunity of AI to really transform everything we've done. Mm-hmm. We talked about Windows... Mm-hmm how Windows Copilot- Mm-hmm ... it will be the operating system that I think will lead the way. Mm-hmm ... with AI and assistance in a way that you haven't seen before. Mm-hmm. That's because, you know, some of our competition either doesn't have that capability in-house. Mm-hmm ... or it's not in their interest to disrupt their own current search model. Mm-hmm. The second thing is with Microsoft 365, we didn't talk a lot about that. Mm-hmm. That's our productivity suite. That's not just, you know, Microsoft Word and PowerPoint, and we're gonna bring Microsoft 365 Copilot- Yep to that, so that you can talk to Excel and have it Mm-hmm you know, do things on your behalf. Mm-hmm. We're also now using things like Designer. Mm-hmm ... which is, I think of it as sort of equivalent to a Canva. Mm-hmm ... but with more powerful capabilities for design and creatives. We're, you know, early in the testing of that, but that's we've already crossed a lot of users on that as well. Mm-hmm. We see that coming. With the new Bing and Microsoft Edge, that is really the big thing. That's the big opportunity. It's a huge market. Mm-hmm ... a huge TAM. We have first mover. Mm-hmm. You know, we don't have any of the innovator's dilemma. Mm-hmm. We're excited to meet customer needs and to go out and get some of those things. I would say broadly across Windows, our devices, and what we're seeing with Microsoft 365... Mm-hmm it is super early days in the internet, super early days of with the development of AI, we're quite excited about what we're gonna be able to do with it. It's very exciting. Yusuf, thank you so much for joining us at the conference. Thanks very much. Great to have you here. Yeah. Thank you. Thanks. That was great.