The processes that transform gas and dust in circumstellar disks into diverse exoplanets remain poorly understood. One key pathway is to study exoplanets as they form in their young ($sim$few~Myr) natal disks. Extremely Large Telescopes (ELTs) such as GMT, TMT, or ELT, can be used to establish the initial chemical conditions, locations, and timescales of planet formation, via (1)~measuring the physical and chemical conditions in protoplanetary disks using infrared spectroscopy and (2)~studying planet-disk interactions using imaging and spectro-astrometry. Our current knowledge is based on a limited sample of targets, representing the brightest, most extreme cases, and thus almost certainly represents an incomplete understanding. ELTs will play a transformational role in this arena, thanks to the high spatial and spectral resolution data they will deliver. We recommend a key science program to conduct a volume-limited survey of high-resolution spectroscopy and high-contrast imaging of the nearest protoplanetary disks that would result in an unbiased, holistic picture of planet formation as it occurs.
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