Google Delays Gemini 3.5 Pro, Sending Alphabet Stock Tumbling

Alphabet’s shares fell about 4% in after-hours trading on Thursday, July 16, 2026, after Bloomberg reported that the company’s flagship Gemini 3.5 Pro model will not launch as promised. The model was unveiled at the May 2026 I/O developer conference with a public rollout slated for June, but no new release date has been provided. Rivals such as OpenAI, Meta and Anthropic have recently introduced models that outperform Google’s current offerings in software-code generation, intensifying market pressure.

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Sources indicate that Gemini 3.5 Pro’s coding capabilities fell short of internal expectations. A late-June data-set update intended to boost coding performance “produced disappointing results.” Google’s internal structure—spanning DeepMind, Google Cloud, Android and consumer-product teams—has created overlapping AI-coding initiatives that slowed progress. Engineers report capacity constraints on AI tools and frustration over the pace, with some researchers leaving for competing labs. Consolidation efforts under the Antigravity platform aim to unite coding tools, but resource bottlenecks persist.

Bureaucracy, technology setbacks delay rollout of Google’s Gemini 3.5 Pro9To5GoogleCNBC

An Alphabet spokesperson told CNBC that the firm is still testing Gemini 3.5 Pro alongside an upgraded Flash model and other variants with partners, and that it remains “productively engaged with the U.S. government.” The statement added that Google is “shipping quickly across a wide range of models while keeping them highly cost-effective for customers.”

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Analysts note that the delay gives OpenAI and Microsoft an “unexpected gift,” as enterprise customers decide which large-language model to embed in billion-dollar projects. Feedback on the earlier Gemini 3.5 Flash model is mixed: design platform Figma praises its speed and quality, while education service Platzi describes it as slower, costlier and less capable than Anthropic’s Claude 3.5 Sonnet. The setback underscores concerns that Google’s research dominance is not translating into product velocity.

Bureaucracy, technology setbacks delay rollout of Google’s Gemini 3.5 Pro

• “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,” — Alphabet spokesperson, CNBC statement

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• “We’re shipping quickly across a wide range of models while keeping them highly cost-effective for customers.” — Alphabet spokesperson, CNBC statement

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• “showing great improvements.” — Google, I/O 2026 presentation

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