Google AI Delay Sends Alphabet Stock Down
Alphabet shares made technology news headlines by falling 4% on Thursday. The fall happened after reports suggested the company delayed the release of its flagship Gemini 3.5 Pro artificial intelligence model. Adding to the pressure, Alphabet shares dipped another 1.5% in pre-market trading as well.
Alphabet share price (Source: Google Finance)
According to a Bloomberg report that references sources familiar with the matter, the model is now months behind schedule while Google works to improve its overall performance. The report said Gemini 3.5 Pro's coding capabilities have not yet met Google's internal expectations.
The delay also comes as competition in the AI sector is quickly intensifying. Rivals OpenAI and Meta recently unveiled new models that are designed to deliver stronger performance in software development and agentic AI tasks.
Google first introduced Gemini 3.5 Pro during its annual Google I/O developer conference in May, and announced that the model was already being used internally but would require some more testing before a wider public release. While the original rollout was expected to begin the following month, the latest reports suggest the launch timeline has slipped.
In response to the reports, an Alphabet spokesperson told CNBC that the company is still focused on delivering advanced AI models while keeping them cost-effective for customers. The spokesperson added that Google is currently testing Gemini 3.5 Pro, which is an upgraded Flash model, and several other AI systems with partners.
Meanwhile, Meta recently introduced its Muse Spark 1.1 AI model, which the company's AI chief, Alexandr Wang, described as Meta's strongest model yet for agentic and coding-related tasks. OpenAI also strengthened competition by launching GPT-5.6 Sol. CEO Sam Altman stated that the new model is 54% more token efficient on agentic coding workloads.
Overall, delays to flagship models could greatly affect investor sentiment and market positioning, which makes Google's progress one of the most closely watched stories in technology news at the moment.
