Pichai defends Google AI strategy as Gemini delay fuels investor concerns about AI race position

Pichai pushes back on claims Google is losing ground in AI race

July 22 (Reuters) - Alphabet (GOOGL.O), opens new tab CEO Sundar Pichai used Wednesday's earnings call to mount a robust defence of Google's AI strategy, pushing back on concerns that the company has fallen behind rivals after delaying a flagship model and ceding ground in AI coding. Investors have become increasingly uneasy over Google delaying the release of Gemini 3.5 Pro, a model originally slated for June that was expected to bolster the company's standing in AI coding and autonomous "agent" tasks, two of the industry's most fiercely contested areas. The latest setback has fueled worries that Google was losing momentum just as OpenAI and Anthropic and a host of Chinese rivals have accelerated the pace of model releases. ⁠On the call on Wednesday, Pichai struck an unusually defensive tone as analysts pressed him on the state of Google's frontier models and whether they could still compete at the cutting edge of AI development. "We've had clearly frontier models. There are many attributes on which we are still at the frontier; there are areas where we've acknowledged we need to improve and coding and agentic coding is an example of that," he said in response to JPMorgan analyst Doug Anmuth, who questioned whether Gemini could remain competitive at the industry's leading edge and noted Google's slower release of models. Rather than dwell on the Gemini 3.5 Pro delay, Pichai repeatedly highlighted Gemini Flash, Google's cheaper, faster "workhorse" model that powers a growing range of applications, including cybersecurity, customer-service agents, data analytics and enterprise software. He pointed to Gemini 3.6 Flash, released this week, saying it had improved by more than 10 points on a coding benchmark compared with the previous version ⁠while using fewer tokens. The company on Tuesday also unveiled Gemini 3.5 Flash-Lite and a cybersecurity-focused Flash Cyber model, while keeping Gemini 3.5 Pro in partner testing. "I think people will be pleased" when Google unveils Gemini 4, Pichai said, describing it as a "very ambitious effort." He stressed that Google is training a significantly larger model designed to compete at the frontier when it is released, adding that the company remains "very committed and very confident" about staying at the leading edge of AI. When Barclays analyst ⁠Ross Sandler raised similar concerns about Google's model release pace, Pichai disclosed that Gemini 4's roadmap includes rolling out models "almost at a monthly cadence." Pichai's vigorous defence underscores a growing challenge facing Google: persuading investors to judge its AI ambitions not by the delay of a single flagship model, but by the scale of an ecosystem spanning cloud ⁠infrastructure, custom AI chips and a portfolio of Gemini models embedded across its products and services. While Google posted another quarter of blistering cloud growth on Wednesday -- up 82%, far above an average estimate of 64% -- Wall Street is increasingly focused on whether the company can regain leadership in AI coding ⁠and frontier reasoning, especially as its capital costs skyrocket. Alphabet raised its capex plans by $15 billion to a range of $195 billion to $205 billion. The company's shares fell more than 3% in after-hours trading. Concerns over Gemini's delays, coupled with several high-profile executive departures, have left the stock down about 9% since the end of April. Reporting by Deborah Sophia in Bengaluru and Kenrick Cai in San Francisco; Editing by Sayantani Ghosh and Shri Navaratnam Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Kenrick Cai Thomson Reuters Kenrick Cai is a correspondent for Reuters based in San Francisco. He covers Google, its parent company Alphabet and artificial intelligence. Cai joined Reuters in 2024. He previously worked at Forbes magazine, where he was a staff writer covering venture capital and startups. He received a Best in Business award from the Society for Advancing Business Editing and Writing in 2023. He is a graduate of Duke University. Reach him on Signal at @kenrick.01.

Alphabet shares fall on report its most powerful AI model Gemini 3.5 Pro is delayed

Google's next flagship Gemini model is reportedly months behind schedule Alphabet shares sank 4% on Thursday following a report that the company has delayed releasing its flagship artificial intelligence model. The search giant's Gemini 3.5 Pro AI model is months behind schedule due to the company's efforts to improve its performance, according to Bloomberg, citing sources familiar with the matter. The model's coding capabilities, in particular, were short of internal expectations and come at a time when rivals like OpenAI and Meta have recently debuted new AI models that outpace Google's current offerings in generating software code, the report said. The company previously announced the Gemini 3.5 Pro AI model in May as part of the company's annual Google I/O developer conference, saying at the time that it was being used internally, but wouldn't be ready for a broader rollout until the following month. An Alphabet spokesperson told CNBC in an emailed statement that the company is "shipping quickly across a wide range of models while keeping them highly cost-effective for customers." "We're currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and we're productively engaged with the U.S. government," the spokesperson said.

Google is not losing the AI race, Pichai tells doubters as cloud jumps 82%

The Alphabet chief conceded Google has ground to make up on coding, even as Q2 revenue hit $119.8bn and 2026 capex climbed again. Sundar Pichai spent Alphabet's Wednesday earnings call doing something he is not used to doing: arguing that Google is not, in fact, falling behind in artificial intelligence. Analysts wanted to know why the next Gemini model had slipped, and whether the company had quietly ceded the frontier to OpenAI and Anthropic. "We've had clearly frontier models," Pichai said on the call. "There are many attributes on which we are still at the frontier; there are areas where we've acknowledged we need to improve and coding and agentic coding is an example of that." For a company that likes to remind everyone it invented the transformer, the admission was unusually candid. The remarks answered a run of pointed questions from JPMorgan's Doug Anmuth and Barclays' Ross Sandler, who pressed him on a delayed Gemini Pro and a release schedule that has trailed rivals. Google's next Pro model is months behind schedule, and coding is exactly the ground on which OpenAI's Codex and Anthropic's Claude have been peeling off developers. Pichai's answer was to promise more, and sooner. He said Google had begun its most ambitious pre-training run yet for Gemini 4, told analysts "I think people will be pleased" when it lands, and signalled that future models would arrive at close to a monthly cadence. He also leaned on demand as evidence that the doubters had it wrong. Google remains "supply constrained," Pichai said, which he cast as a sign of momentum rather than strain. Gemini models now process 22 billion API tokens a minute, and nearly 500 cloud customers have each run more than a trillion tokens over the past year. The figures underneath the argument were strong. Alphabet posted revenue of $119.8 billion for the quarter, up 24% on a year earlier, while Google Cloud grew 82% to $24.8 billion, comfortably ahead of the roughly 64% analysts had pencilled in. Cloud backlog reached $514 billion. Advertising, still the engine, did its share alongside cloud. YouTube brought in $11.06 billion in ad revenue, up from $9.79 billion a year earlier, and the wider advertising business kept growing even as search shifted towards AI-generated answers. Consumer numbers held up too. The Gemini app hit 950 million monthly active users, its daily total tripling over the past year, and nearly 90% of the Fortune 100 now run Gemini Enterprise. Google's full-stack bet, from custom chips to models to agents, is the version of events Pichai would like investors to read. Net income came in at a startling $112.1 billion, though most of that was an accounting mirage. Around $80 billion of it was an unrealised gain on Alphabet's stake of roughly 14% in Anthropic, whose valuation tripled during the quarter. What unsettled the market was spending. Alphabet lifted its 2026 capital expenditure guidance by about $15 billion, to between $195 billion and $205 billion, extending a year of record AI capex across Big Tech, and management signalled the bill would climb again in 2027. The message to investors was that the constraint is chips and data centres, not demand, and that Google intends to keep buying its way to the front. Wall Street was not fully persuaded. Shares fell more than 3% after hours, and are down roughly 9% since late April on the Gemini delays and a string of senior departures. The anxiety is not new. The next Gemini Pro was reportedly expected in June, and its slip has coincided with a run of departures from Google's AI ranks, feeding a story in which the company that published the transformer paper keeps struggling to turn research into shipped product. The concession on coding was the tell. A year ago Google was beating estimates and closing on Nvidia as the most valuable company in the world; now its chief executive is answering questions about whether it can keep pace. The next Gemini, whenever it ships, will have to make his case for him.

Alphabet's Gemini delay, spending worries loom over earnings

July 21 (Reuters) - Alphabet faces heightened scrutiny from investors as a delay in the launch of a model key to its AI ambitions adds to worries over the payoff from massive data-center spending, months after raising expectations with a blockbuster quarter for cloud sales. The Google parent (GOOGL.O), opens new tab -- set to report second-quarter results on Wednesday -- has delayed from June the launch of its next flagship model, Gemini 3.5 Pro, built especially to catch up with rivals in the lucrative market for AI coding tools and agentic AI tasks. The setback has raised concerns as Chinese open-source models increasingly challenge top U.S. labs for customers amid ⁠growing worries about steep AI bills that have also fanned fears that Big Tech could be over-building capacity. "While Google is missing the boat on AI coding and that's a very real growing concern ... Google's strategy is all about the ecosystem," said Dave Wagner, portfolio manager at Aptus Capital Advisors. Alphabet increased its 2026 capital expenditure guidance to between $180 billion and $190 billion in April and has announced plans to raise about $85 billion in equity offerings, including an investment from Berkshire Hathaway (BRKa.N), opens new tab. Alphabet shares are down about 9% since late April -- when it posted a 63% jump in cloud sales -- lagging other so-called "Magnificent Seven" stocks ⁠during the period. The company has also lost high-profile employees, including Gemini co-lead Noam Shazeer and Nobel laureate John Jumper, a key Google DeepMind executive, to rivals. Analysts have said Google's advantage in the AI race lies in its ownership of a large consumer distribution network, on top of its AI models, cloud infrastructure and custom silicon. Overall, Alphabet ⁠shares remain nearly 13% higher for the year, making it the second-best performer among the Mag 7 group. Analysts expect the company's second-quarter revenue growth to ease only slightly from the first three months of 2026, as the cloud ⁠business drives results. Alphabet is expected to post a 21.3% rise in revenue for the April-June period to $116.93 billion, according to data compiled by LSEG. Cloud sales are estimated to grow at a ⁠similar 64% pace, while ad revenue is forecast to expand at a slower 13.7%. The cloud business has benefited from growing deals for Google's custom AI chip business, including multi-billion-dollar agreements with Meta Platforms (META.O), opens new tab and Anthropic. Reporting by Deborah Sophia and Rashika Singh in Bengaluru; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Disrupted Rashika Singh Thomson Reuters Rashika reports on brokerages and financial markets, alongside technology and corporate developments for Reuters, with a focus on U.S. and global companies. Her coverage spans analyst actions, earnings-driven stock moves, semiconductors, artificial intelligence, aerospace and defense, and high‑growth technology stocks, often through breaking news and market‑moving "hot stock" coverage. Her reporting primarily appears in the Technology, Business, and Markets sections of the Reuters website and wire service, examining how brokerage research, corporate strategy and earnings influence investor sentiment and global competition. She regularly contributes to Reuters' spot and breaking‑news coverage, rather than a named column or standalone newsletter.

Google's Gemini delay exposes a deeper problem: employee frustration

Why it matters: As the company's cash flow just turned negative, investors and competitors are questioning Google's standing in the AI race. State of play: Google's Gemini 3.5 Pro, its most powerful model in the works, is months behind, per Bloomberg, but the company did just release a series of smaller, more efficient models, garnering mixed reactions. * Top executives from competing AI labs were quick to shade the releases, with Meta's Alexander Wang saying "Gemini who?" on X, and others asking top Google leadership when more powerful models will be ready. * Despite beating estimates in its latest earnings on Wednesday, the company's free cash flow turned negative, in large part due to its AI investments: It's on track to spend $190 billion this year. Yes, but: Google showed 82% growth in cloud revenue, but search revenue came in slightly below Wall Street's expectations, exacerbating concern about the company's AI capex paying off, Mandeep Singh, Bloomberg Intelligence analyst, said on Bloomberg TV. Zoom out: The perceived dip in AI capabilities comes amid the ongoing AI talent wars, which have hit Google the hardest. * Several top researchers have departed for competing AI labs. * Those departures include influential researcher and Gemini co-lead Noam Shazeer, who's now at OpenAI, and Nobel Prize in Chemistry winner John Jumper, who left for Anthropic. * Multiple employees have publicly said they resigned over Google's April deal with the Pentagon that allows the military to use its technology. Sources who spoke to Axios anonymously said the deal comes up often during exit interviews. * The sources spoke on the condition of anonymity due to fear of retaliation. What they're saying: "We're behind," one employee told Axios, referring to the company's model capabilities compared with competitors. * Some sources tied the recent dip in morale to the company's military deal, but others said the burnout is about feeling one step behind competitors. * Google didn't prioritize agentic coding as it raced to defend search from ChatGPT, a DeepMind employee who worked on model training said. * Gemini's models do not crack the top 10 most used in the LLM leaderboard tracked by OpenRouter. Zoom in: It's a "constant battle" for those morally against the Pentagon deal, one source said, adding this has led to "emotional burnout." * Alex Turner, a former research scientist at DeepMind, resigned over Google's military contracts. * He told Axios that CEO Demis Hassabis, who released an AI safety framework last week, doesn't have a consistent internal presence the way it seems competing AI CEOs Sam Altman and Dario Amodei do with their employees. The other side: Google disputes the notion that morale problems are leading to shortfalls in its models or that employees are leaving in large numbers due to the company's Pentagon contract. * Google says its attrition rates for the first half of this year are lower for AI talent than they were at this time last year and that more than 90% of those offered an AI role at Google accept the position. The big picture: Cost has been a key focus for a lot of enterprises suddenly experiencing AI sticker shock. * While the new models Google released this week aren't at the leading edge in performance, delivering models that offer more bang for the buck meets a clear need in the market. * "We're feeling good about this week's Flash launches, our roadmap and the incredible demand we're seeing for our models," a Google spokesperson told Axios. Reality check: Model providers leapfrogging each other is the norm for the AI race. * Leads tend to be fickle and short-lived. * It was just last year that Google was riding high. Then Anthropic seemed unbeatable with the arrival of Mythos. * Now, OpenAI appears poised to be the leapfrogger with a new model it plans to brief lawmakers on next week. The bottom line: Google can afford to be leapfrogged. It can't afford to lose its talent or its investors' patience.

Google Gemini launch delayed as tech falls short of internal goals, Bloomberg News reports

July 16 (Reuters) - Alphabet's (GOOGL.O), opens new tab Google is months behind schedule on the release of Gemini 3.5 Pro, its most powerful flagship AI model, as the tech giant works to improve its capabilities, particularly in coding, Bloomberg News reported on Thursday. The delay comes amid fierce competition among AI developers to boost model performance, cut costs and expand enterprise capabilities, fueling a steady, industrywide stream of new systems and reasoning models. Here are some details: Reporting by Juby Babu in Mexico City; Editing by Pooja Desai Our Standards: The Thomson Reuters Trust Principles., opens new tab

Sundar Pichai admits Google trails in AI coding

Alphabet CEO Sundar Pichai stated during the company's Q2 2026 earnings call that Google needs to enhance its coding and agentic coding capabilities. He emphasized that a larger Gemini 4 base model is essential for maintaining competitiveness in the evolving AI landscape. These comments followed the introduction of Gemini 3.6 Flash, which Google released one day prior. Pichai noted that Gemini 4 is currently in pretraining and acknowledged that the unreleased Gemini 3.5 Pro faces delays due to coding issues. Pichai asserted confidence in Google's strengths but admitted that there is room for improvement in coding and agentic coding. He described the launch of 3.6 Flash as a positive development, stressing the importance of larger base models for future breakthroughs. Previously, in May, during the Hard Fork podcast, he indicated that Google was "a bit behind" in agentic coding because it lacks a developer-facing product that generates valuable usage data, which competitors are already leveraging. As for the much-anticipated flagship model, Gemini 3.5 Pro has yet to be released. Google had announced the 3.5 series at the I/O event in May, launching 3.5 Flash simultaneously, with plans for 3.5 Pro to debut the following month. Google now indicates that it is "currently testing with partners," with a broader release contingent on readiness. Bloomberg reported that coding performance issues contributed to the delay, as noted by SEJ. An update to the model's training data aimed at improving its coding capabilities did not yield expected results. The delays have caused unrest within the company, leading to the departure of two senior AI researchers in June: Noam Shazeer, co-lead of Gemini, and John Jumper from AlphaFold, who left for OpenAI and Anthropic, respectively, amid concerns regarding Google's standing in AI coding tools. Recently, Google launched Gemini 3.6 Flash, an updated version providing improvements in coding and efficiency. Notably, this version produces 17% fewer output tokens than the previous 3.5 Flash, enhancing cost-effectiveness while bolstering coding abilities. The current status of the Gemini models is summarized as follows: Gemini 3.5 Flash is available as a general-purpose model, while Gemini 3.6 Flash, also available, serves as an updated workhorse. Gemini 3.5 Flash-Lite has been released as a faster, lower-cost alternative, whereas Gemini 3.5 Pro is still in partner testing with no confirmed release date. Gemini 4 remains in pretraining without a confirmed timeline for its launch. On the DeepSWE coding benchmark, Google reported a score of 49%, an increase from 37% with 3.5 Flash. Google characterizes 3.6 Flash as the new standard workhorse, while both 3.5 Flash and the newly introduced Flash-Lite tier are being integrated into Google Search. Moving forward, the critical focus lies on the timely release of 3.5 Pro and adherence to the monthly release schedule mentioned by Pichai. Successfully meeting these targets will demonstrate Google's capability to transition from planning to delivering new products. Gemini 4 is seen as a long-term goal, with its pretraining process described as the company's most ambitious effort yet, though no release date has been set.

Sundar Pichai pushes back on claims Google is losing ground in AI race

The latest setback has fueled worries that Google was losing ⁠momentum just ⁠as OpenAI and Anthropic and a host of Chinese rivals have accelerated the pace of model releases. On the call on Wednesday, Pichai struck an unusually defensive tone as analysts pressed him on the state of Google's frontier models and whether they could still compete at the cutting edge of AI development. Alphabet CEO Sundar Pichai used Wednesday's earnings call to mount a robust defence of Google's AI strategy, pushing back on concerns that the company has fallen behind rivals after delaying a flagship model and ceding ground in AI coding. Investors have become increasingly uneasy over Google delaying the release of Gemini 3.5 Pro, a model originally slated for June that was expected to bolster the company's standing in AI coding and autonomous "agent" tasks, two of the industry's most fiercely contested areas. The latest setback has fueled worries that Google was losing ⁠momentum just ⁠as OpenAI and Anthropic and a host of Chinese rivals have accelerated the pace of model releases. On the call on Wednesday, Pichai struck an unusually defensive tone as analysts pressed him on the state of Google's frontier models and whether they could still compete at the cutting edge of AI development. "We've had clearly frontier models. There are many attributes on which we are still at the frontier; there are areas where we've acknowledged we need to improve and coding and agentic coding is an example of that," he said in response to JPMorgan analyst Doug Anmuth, who questioned whether Gemini could remain competitive at ⁠the industry's leading edge and noted Google's slower release of models. Rather than dwell on the Gemini 3.5 Pro delay, Pichai repeatedly highlighted Gemini Flash, Google's cheaper, faster "workhorse" model that powers a growing range of applications, including cybersecurity, customer-service ⁠agents, data analytics and enterprise software. He pointed to Gemini 3.6 Flash, released this week, saying it had improved by more than 10 points on a coding benchmark compared with the previous version while using fewer tokens. The company on Tuesday also unveiled Gemini 3.5 Flash-Lite and a cybersecurity-focused Flash Cyber model, while keeping Gemini 3.5 Pro in partner testing. "I think people will be pleased" when Google unveils Gemini 4, Pichai said, describing it as a "very ambitious effort." He stressed that Google is training a significantly larger model designed to compete at the frontier when it is released, adding that the company remains "very committed and very confident" about staying at the leading edge of AI. When Barclays analyst Ross Sandler raised similar concerns about Google's model release pace, Pichai disclosed that Gemini 4's roadmap includes rolling out models "almost at a monthly cadence." Pichai's vigorous defence underscores a growing challenge facing Google: persuading investors to judge its AI ambitions ⁠not by the delay of a single flagship model, but by the scale of an ecosystem spanning cloud infrastructure, custom AI chips and a portfolio of Gemini models embedded across its products and services. While Google posted another quarter of blistering cloud growth on Wednesday - up 82%, far above an average estimate of 64% - Wall Street is increasingly focused on whether the company can regain leadership in AI coding and frontier reasoning, especially as its capital costs skyrocket. Alphabet raised its capex plans by $15 billion to a range of $195 billion to $205 billion. The company's shares fell more than 3% in after-hours trading. Concerns over Gemini's delays, coupled with several high-profile executive departures, have left the stock down about 9% since the end of April.

Sundar Pichai Just Said Something About Google's Gemini 4 -- and Sam Altman, Elon Musk Should Care - Alphabe

"We have started our most ambitious pretraining run yet for Gemini 4," Pichai said. "I am very excited by the progress I'm seeing internally. I'm confident that people will be pleased." The remark stood out because Google has neither unveiled Gemini 4 nor announced a launch timeline. Yet Pichai said the company is building the model to compete at "the frontier level of where the frontier will be when Gemini 4 comes out." That suggests Google isn't trying to match today's leading AI models. Instead, the company is targeting the capabilities it expects competitors to have by the time Gemini 4 is released. AI Race Intensifies Pichai also acknowledged that Google still has room to improve in agentic coding, an area where rivals have gained momentum. However, he said the recently released Gemini Flash 3.6 model improved by more than 10 percentage points on coding benchmarks within six weeks and that Google now plans to ship updated models every month. Alphabet Q2 Earnings The AI update accompanied another strong quarter for Alphabet. The company posted its 12th straight quarter of double-digit revenue growth, while Google Cloud revenue climbed 32% year over year. The company also reported a record backlog of more than $106 billion in remaining performance obligations. Price Action: Alphabet's Class A shares closed 1.46% lower at $342.09 on Wednesday before falling another 3.31% in after-hours trading. Class C shares ended the session down 1.24% at $341.91 and slipped an additional 2.92% after the bell. Benzinga edge rankings indicate that GOOGL has a Momentum score in the 87th percentile and a Growth score in the 90th percentile. Photo courtesy: Jack Gruber-USA TODAY NETWORK via Imagn Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Alphabet's Gemini delay, spending worries loom over earnings

The Google parent - set to report second-quarter results on Wednesday - has delayed from June the launch of its next flagship model, Gemini ⁠3.5 ⁠Pro, built especially to catch up with rivals in the lucrative market for AI coding tools and agentic AI tasks. Alphabet faces heightened scrutiny from investors as a delay in the launch of a model key to its AI ambitions adds to worries over the payoff from massive data-center spending, months after raising expectations with a blockbuster quarter for cloud sales. The Google parent - set to report second-quarter results on Wednesday - has delayed from June the launch of its next flagship model, Gemini ⁠3.5 ⁠Pro, built especially to catch up with rivals in the lucrative market for AI coding tools and agentic AI tasks. The setback has raised concerns as Chinese open-source models increasingly challenge top U.S. labs for customers amid growing worries about steep AI bills that have also fanned fears that Big Tech could be over-building capacity. "While Google is missing the boat on AI coding and that's a very real growing concern ... Google's strategy is all about ⁠the ecosystem," said Dave Wagner, portfolio manager at Aptus Capital Advisors. Alphabet increased its 2026 capital expenditure guidance to between $180 billion and $190 billion in April and has announced ⁠plans to raise about $85 billion in equity offerings, including an investment from Berkshire Hathaway. Alphabet shares are down about 9% since late April - when it posted a 63% jump in cloud sales - lagging other so-called "Magnificent Seven" stocks during the period. The company has also lost high-profile employees, including Gemini co-lead Noam Shazeer and Nobel laureate John Jumper, a key Google DeepMind executive, to rivals. Analysts have said Google's advantage in the AI race lies in its ownership of a large consumer distribution network, on top of its AI models, cloud infrastructure and custom silicon. Overall, Alphabet shares remain nearly 13% higher for the year, making it the second-best performer among the Mag 7 group. Analysts ⁠expect the company's second-quarter revenue growth to ease only slightly from the first three months of 2026, as the cloud business drives results. Alphabet is expected to post a 21.3% rise in revenue for the April-June period to $116.93 billion, according to data compiled by LSEG. Cloud sales are estimated to grow at a similar 64% pace, while ad revenue is forecast to expand at a slower 13.7%. The cloud business has benefited from growing deals for Google's custom AI chip business, including multi-billion-dollar agreements with Meta Platforms and Anthropic.

Alphabet Stock Sinks on Reports of Google Gemini Delays - Alphabet (NASDAQ:GOOGL)

* GOOGL stock is down. See the chart and price action here. Gemini's Coding Weakness Puts Google Behind Rivals Bloomberg reported that the release of Gemini 3.5 Pro has slipped by several months as engineers work to improve the model's capabilities, particularly in coding -- an area where rivals like OpenAI and Anthropic have taken a clear lead. The delay has frustrated employees and raised concerns that Google risks ceding further ground in one of the most commercially critical segments of AI, according to sources familiar with the matter. At the core of the slowdown is organizational complexity, per Bloomberg's report. Multiple teams across Google -- including DeepMind, Cloud, Android and Search -- are simultaneously developing AI coding tools, leading to overlapping efforts, shifting priorities and slower execution. Recent attempts to improve Gemini's coding performance, including updated training data, have reportedly fallen short. Meanwhile, competitors continue to roll out more advanced models, widening the performance gap. Google Defends Pace, Highlights Ongoing Testing "We're shipping quickly across a wide range of models while keeping them highly cost-effective for customers," a Google spokesperson told Bloomberg in a statement. "We're currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and we're productively engaged with the US government on model testing and broader frameworks." The setbacks have weighed on investor sentiment, with Alphabet shares slipping following the report, highlighting growing skepticism about Google's ability to maintain its edge in AI. GOOGL Stock Price Activity: Alphabet stock was down 4.52% at $354.17 at the time of publication Thursday, according to data from Benzinga Pro. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Alphabet stock falls on report of Gemini AI model delays By Investing.com

Investing.com -- Alphabet Inc. (NASDAQ:GOOGL) shares fell 2.3% Thursday afternoon following a Bloomberg report that the company's Google is months behind schedule on delivering Gemini 3.5 Pro, its most powerful flagship AI model. The delay stems from Google taking additional time to improve the model's capabilities, particularly in coding, according to people familiar with the matter cited in the report. The setback has frustrated Google engineers, AI researchers and managers, with many concerned the company risks losing market position as rivals Anthropic and OpenAI produce models that exceed Gemini's capabilities. Both OpenAI and Meta Platforms Inc. recently released new models that outpace Google's current offerings in AI for writing code. Late last month, Google updated the data being used to train Gemini to improve these skills, but the results were disappointing, according to the report. A Google spokesperson said the company is shipping quickly across a wide range of models while keeping them cost-effective for customers. The spokesperson added that Google is currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and is engaged with the US government on model testing and broader frameworks. The report noted that Google's structure, with multiple layers of stakeholders involved in preparing models for release and working to integrate AI across a vast product portfolio including search, maps and YouTube, can cause delays. Google has also been in talks with the US government, which has been increasingly monitoring AI companies' most advanced models, about its capabilities and industry safety standards.

Alphabet slips after reports of a delay for Gemini 3.5 Pro

According to Bloomberg, citing people familiar with the matter, Google has postponed the launch of Gemini 3.5 Pro by several months to improve performance ahead of a broad rollout. The model's coding capabilities are said to be below internal expectations, at a time when code generation has become one of the main battlegrounds among artificial intelligence labs. Unveiled in May at the Google I/O conference, Gemini 3.5 Pro was already being used internally, but its commercial launch had been announced for a later date. Asked by CNBC, an Alphabet spokesperson said the company continued to roll out new models quickly while ensuring it maintained strong cost competitiveness. The spokesperson also said Gemini 3.5 Pro, a new version of Flash, and other models were currently being tested with several partners, while noting that discussions with the US government were continuing. The delay comes as competition heats up in the market for programming-focused models. Last week, Meta unveiled Muse Spark 1.1, described by its chief AI officer, Alexandr Wang, as the group's best-performing model for coding tasks and AI agents. For its part, OpenAI launched GPT-5.6 Sol AI. Chief executive Sam Altman says the model improves token-processing efficiency by 54% in programming tasks carried out by AI agents. Anthropic, as well as several Chinese labs including Z.ai, are also intensifying competition with open-weight models available for free through the open-source ecosystem. The reported postponement of Gemini 3.5 Pro underscores the pressure now bearing down on the leading artificial intelligence players. Beyond the pace of releases, labs are trying to deliver ever more capable models, especially for software development use cases, while keeping operating costs under control. In this technology race, every delay is closely watched by investors, who are assessing whether the tech giants can hold on to their lead against increasingly aggressive competition.

Google says Gemini 4 will help it catch up with OpenAI, Anthropic despite AI coding gap

Gemini now has 950 million monthly active users, while Google Cloud revenue surged 82 per cent year-on-year, driven by AI demand. Amid the rising competition in the AI space, Google thinks that the upcoming Gemini 4 model will help it climb the ladder. As per the reports, the company admits that it still trails rivals in AI coding and agentic AI capabilities. During the Alphabet's latest earnings call, CEO Sundar Pichai pushed back on the claims that Google is falling behind. He stated that Gemini 4 is the company's most ambitious model so far and it has been built on a much larger scale than previous Gemini versions. While Google did not reveal technical details, Pichai said the new model would deliver noticeable improvements once it launches. His comments come amid reports that Gemini 3.5 Pro has been delayed after failing to meet Google's internal expectations in coding performance and autonomous AI tasks. These are areas where competitors such as OpenAI and Anthropic have gained momentum with Codex and Claude Code. Also read: OpenAI and Sam Altman under legal scrutiny after ChatGPT gives dangerous medical advice: What happened Google admits coding remains an area to improve As per reports, Pichai acknowledged that coding is one of the areas where Google still needs to improve. Instead of focusing on Gemini 3.5 Pro, the company introduced the Gemini 3.6 Flash model. The company stated that the model delivers stronger coding performance than its predecessor while reducing token usage, making it more cost efficient for developers. The company also introduced Gemini 3.5 Flash-Lite for lower-cost workloads and Gemini 3.5 Flash Cyber, a cybersecurity-focused model available to select government and enterprise partners. Google said Gemini 3.5 Pro remains in testing with partners ahead of a wider release. Even after the criticism around the flagship AI model, Google says Gemini usage continues to rise. The company revealed that Gemini now has 950 million monthly active users, up from 750 million in late 2025. Alphabet also reported strong financial results, with Google Cloud revenue rising 82 per cent year over year to $24.8 billion, driven by growing demand for AI infrastructure and enterprise AI tools.