Alphabet CEO Sundar Pichai on inflation, investing for growth, and free speech online

Google CEO Sundar Pichai said while consumers are placing the Covid pandemic in their rearview mirror, the economy is a growing concern for the company and the broader market.

"We see uncertainty ahead, as does anyone else," Pichai said Wednesday in an interview with CNBC's Deirdre Bosa at Google's annual I/O conference in Mountain View, California. "The good thing is that we have been around for a long time. [We] have worked in times like this, whether it was 2008 or the early days of the pandemic, and we are looking for the long term.

He also said he believed the economy "will take time to get out of the current high inflation rate."

"What creates uncertainty is that there are so many different factors, whether supply chain issues or rising energy prices," he said.

"I think people see help in certain sectors," he suggested, citing travel as an example. "But then there are other new areas struggling, perhaps because of supply chain constraints... Energy is a problem, for example. In some cases, rents increased, and food prices increased.

The Nasdaq is headed for its sharpest quarterly decline since late 2008, when the economy was in a housing crisis. Consumer prices rose 8.3% in April, the Bureau of Labor Statistics said Wednesday, higher than forecast and near a 40-year high of 8.5%.

Shares of Alphabet, Google's parent company, are down about 22% this year, dropping sharply along with the rest of the technology sector as fears of inflation and higher interest rates pushed investors into perceived safer assets.

At the end of April, Alphabet's earnings fell short of analysts' forecasts, in large part due to the massive YouTube package it piled up with other digital advertising firms in the first quarter. In addition, executives cited lower YouTube ad spending in Europe after Russia invaded Ukraine in February.

"If you serve [ads] across the economy, many macro factors, like GDP growth, ultimately affect advertiser spending," Pichai said.

Pichai says economic history is not all doom and gloom. Based on comments from Alphabet CEO Philip Schindler last month, he noted that people were back on the move, which is a crucial clue for Google's central advertising unit.

"We're seeing the journey continue," Pichai said. "There are signs that post-pandemic people are moving, and some are returning to normal. However, what causes uncertainty is that there are so many different factors, be it supply chain issues or rising energy prices. Trying to put it all together is where the tension lies.

Pichai cited its technology investments as an important way to keep its business strong during difficult times and did not say the company planned to delay hiring or withdraw in certain areas.