Full Breakdown
Google’s Gemini 3.5 Pro Delayed Amid Coding Gaps and Internal Friction
7/18/2026, 11:19:54 AM
Core Event: Gemini 3.5 Pro Release Postponed
Alphabet’s Google announced that the flagship Gemini 3.5 Pro model will not launch as planned. The model, originally slated for a broader rollout in June after CEO Sundar Pichai’s May I/O developer conference, has been pushed back by several months while engineers work to improve its programming capabilities. Internal sources say the revised training data introduced at the end of May failed to close the performance gap, especially in code generation.
Background & Context: “Code Red” and the AI Race
The delay follows Google’s 2022 “code red” response to ChatGPT, a company-wide effort to accelerate AI development and protect its search business. Since then, OpenAI and Anthropic have released models—such as OpenAI’s GPT-5.6 Sol, which CEO Sam Altman described as 54 % more token-efficient on coding tasks—that now outpace Google’s current offerings.
Internal Coordination Challenges
Multiple product groups—including Google Cloud, DeepMind, the Android team, and various consumer-product units—are each building AI coding tools. Former employees describe the process as “trying to boil an ocean,” with duplicated mandates and competing priorities slowing progress. Early restrictions on using Gemini for proprietary code further limited experimentation. To reduce chaos, Chief AI Architect Koray Kavukcuoglu is consolidating tools under the “Google Antigravity” framework, and DeepMind has created a dedicated coding team led by research engineer Sebastian Borgeaud.
Competitive Landscape: Rivals Overtake in Code Generation
OpenAI and Anthropic have recently launched models that surpass Gemini in benchmark tests for writing and executing software code. Anthropic’s Claude 3.5 Sonnet and OpenAI’s GPT-5.6 Sol are cited as the new standards for enterprise developers, pressuring Google to close the gap.
Market Impact: Stock Decline and Cloud Revenue Concerns
News of the delay triggered a sharp sell-off in Alphabet shares. Reported declines range from 2 % (Bloomberg) to as much as 5 % intraday (Bitget), with the stock closing down roughly 2.3-3 % (BigGo) and 4.4 % (Bitget). Analysts note that Google Cloud’s growth depends on competitive AI-as-a-service offerings; a weaker Gemini could erode cloud revenue and jeopardize the company’s dominance in search-driven advertising.
Official Statements & Responses
Google’s spokesperson emphasized that the company is “shipping quickly across a wide range of models while keeping them highly 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 we’re productively engaged with the U.S. government on model testing and broader frameworks.”
Criticism & Opposition
Current and former engineers express frustration that internal bureaucracy and factionalism are slowing innovation. Some engineers maintain that “code should be written by humans,” resisting broader AI adoption. The internal tension has spurred a wave of resignations, with talent moving to Anthropic and other top labs.
Conflicting Reports & Gaps
Sources differ on the exact magnitude of the stock decline (2 % vs. 2.3-3 % vs. 4 % vs. 4.4 % vs. 5 %). No definitive public launch date for Gemini 3.5 Pro has been provided, and detailed benchmark results for the revised model remain undisclosed.
Verbatim Quotes
- “We're shipping quickly across a wide range of models while keeping them highly cost-effective for customers.” — Google spokesperson
- “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.” — Google spokesperson
- “1 Flash model, yet slower, and it remains far less capable than premium offerings from competitors.” — Freddy Vega, CEO, Platzi
