When Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) introduced Gemini 3.5 Flash at its I/O developer conference in mid-May, the company said the model's more powerful sibling, Gemini 3.5 Pro, would arrive in June. June came and went.
On Thursday, Bloomberg reported that the flagship AI (artificial intelligence) model is months behind schedule as Google works to improve its capabilities in coding — and that some inside the company worry rivals OpenAI and Anthropic are shipping models that have passed Gemini by.
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After peaking at $408.61 earlier this year, Alphabet shares closed Friday at $346.77, a decline of about 15%. That's a modest pullback by most standards. But it's a notable wobble for a stock that has been one of the market's favorite ways to bet on AI.
So, is the AI leader actually falling behind? Gemini 3.5 Pro is late — that much is settled. But does the delay change the investment case? Alphabet's own numbers argue that it doesn't. At least not yet.
The timeline is what makes this delay notable. Google launched Gemini 3 in late 2025, and the 3.5 generation was supposed to continue a rapid release cadence, with the Flash version announced in May and the Pro version promised a month later.
Instead, according to Bloomberg's reporting, Google updated the data used to train Gemini in an attempt to improve its coding skills, and the results were disappointing.
Google hasn't announced a new launch date.
"We're currently testing 3.5 Pro, an upgraded Flash model, and other models with partners," the company said in a statement, adding that it is "shipping quickly across a wide range of models while keeping them highly cost-effective for customers."
After all, coding is arguably the main battleground for AI labs right now, and it's a big part of what enterprise customers pay for. A flagship model that can't yet clear the company's own bar there is an uncomfortable place for Google to sit while rivals keep shipping.
And the stakes are bigger than one product date. Alphabet expects capital expenditures of as much as $190 billion this year, much of it going toward the infrastructure behind its AI push. Spending on that scale assumes Gemini stays competitive at the frontier. A model that slips by a month is noise. A pattern of slipping models would worry me.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
