I'm not actually sure on balance how much transcode gets done in hardware vs software, since it's also very amenable to using batch compute that's otherwise idle. I'll guess that most or all live transcoding - streams, on-the-fly transcode into formats not pregenerated - are done in hardware, and transcoding new formats for the back catalog are probably done on a mixture of mechanisms where and when capacity is available.
(Source: Googler, not on YouTube though.)
I'm not actually sure on balance how much transcode gets done in hardware vs software, since it's also very amenable to using batch compute that's otherwise idle. I'll guess that most or all live transcoding - streams, on-the-fly transcode into formats not pregenerated - are done in hardware, and transcoding new formats for the back catalog are probably done on a mixture of mechanisms where and when capacity is available. (Source: Googler, not on YouTube though.)